DoCoMo considers opening network to rivals

9 Feb 2006

Japan’s leading mobile operator by subscribers NTT DoCoMo, says it is considering plans to open part of its network to new market entrants to help them enter the already crowded domestic market. The company’s president Masao Nakamura told the Financial Times that his company had initiated talks with several companies interested in launching services and that he would prefer not to allow this kind of network ‘roaming’ by competitors. The DoCoMo supremo added that such an arrangement would only be temporary and would be dependent upon it securing reasonable fees for allowing access. He went on to say that the cellco would not allow newcomers to have access in major cities, but rather would encourage roaming services in outlying areas where it is not so cost-effective for new players to deploy their own networks.

DoCoMo’s willingness to open its network illustrates the pressure it is under from the government to allow further competition, even though its own revenues are on the decline. In the nine months to December 2005 the cellco reported a 32% drop in net profits to JPY516 billion (USD4.36 billion) and the company is forecasting a 19% drop in full-year earnings to JPY604 billion on flat revenues of JPY4.78 trillion. Nonetheless, it faces the prospect of three new operators into a saturated market next year and is readying itself for the introduction of mobile number portability (MNP) later in 2006, both of which will crank up competition still further. ‘We don’t welcome it, at all,’ said Mr Nakamura, but ‘we understand that it is impossible to build a network throughout Japan unless you spend a certain number of years on it and this is what the public thinks too.’