DoCoMo to boost 3G handset capabilities in bid to halt KDDI’s dominance

24 May 2004

Japan’s leading cellco NTT DoCoMo has said that it is planning to launch a range of new high-powered handsets in a bid to boost its share of Japan’s third-generation (3G) mobile market. DoCoMo dominates the country’s 2G services sector with 42.54 million subscribers to its PDC network at the end of April 2004. However, it has fallen well behind rival operator KDDI in the race to sign 3G customers, claiming just 3.58 million connections to its W-CDMA network at the end of last month, compared to the 13.998 million CDMA2000 1X subscribers boasted by KDDI. In a bid to rectify the situation DoCoMo said at the weekend that it would soon launch three new mobile terminals, one each from NEC, Panasonic and Fujitsu, offering longer battery life, improved colour screens and the latest built-in camera technologies. It is hoping that the new handsets will boost its 3G subscriber base to over ten million by the end of March 2005. The launch will put extra pressure on Vodafone KK, which by the end of April had migrated just 151,400 customers to its own W-CDMA offering, giving it a 3G market share of just 0.85%.

DoCoMo is desperate to take a bigger share of the 3G services market to help offset stagnating average revenue per user (ARPU) returns on its 2G network. It recently warned shareholders that it is expecting its first ever drop in full year revenues, thanks to a combination of discounted tariff packages and the introduction of a fixed-rate data plan for its 3G network. Sales are expected to decline by 2.5% to JPY4.92 trillion in the year to the end of March 2005, with operating profit forecast to fall by around 25% to JPY830 billion.

PriMetrica's GlobalComms Database