The Japanese Wireless Tsunami, as NTT DoCoMo is often referred to for the blistering pace at which it grew its market share and revenues, is finding it hard to prop up its topline. Does it mean that the telecommunications major is on the slowdown trail?
The operating environment in the mobile communication industry became even more challenging in fiscal 2004 as the mobile phone penetration rate increased, competition between service providers intensified, and the likely introduction of mobile number portability in fiscal 2006 loomed over the horizon.Mo
NTT DoCoMo, the pioneering cel lular giant from Japan, which once won accolades for its innovative i-mode data and 3G services, and emerged as a major threat to America Online, is now struggling to grow. The company’s revenues have been on the slide for the last three quarters including the recently concluded second quarter ending June 2005. In fact, the company shocked markets when it reported a revenue drop of 4% for the fiscal 2004; it was for the first time that the company reported a decline in its topline since it came into existence in 1992 as an offshoot of the parent, the state-owned NTT, Japan’s largest telecommunications company.
With the topline refusing to move up, slow growth in the number of new customers signing up for its various services and intensifying competition, DoCoMo is hard pressed to find new ways to grow. “Company has to find a non-traffic-based revenue model to increase and sustain its revenues,” admits Masao Nakamura, President and CEO, DoCoMo in the Annual Report FY2004. Will the wireless giant be able to tide over the crisis? |
