NTT DoCoMo, Inc. began as NTT Mobile Communications Network, Inc. in 1991. Formed as a subsidiary of the Nippon Telegraph and Telephone (NTT), Japan’s former monopoly landline local and long distance company, NTT Mobile Communications took over the operations for NTT’s wireless divisions. The company provided paging, car, in-flight, and later, mobile phone services.
The DoCoMo nickname, an acronym for "Do Communications over the Mobile Network", was quickly adopted. Growing from 1 million analog mobile users in 1992 to over 27 million users (combined mobile services) by 2000, DoCoMo continually set the market trends in mobile communications.
In 1993, digital mobile service was introduced using PDC (personal digital cellular). By 1994, the cellular market explosion took off with customers able to buy instead of rent mobile phones. PHS (personal handyphone services) soon arrived and DoCoMo found itself competing with parent company, NTT (also offering PHS). By 1996, DoCoMo had 8 million subscribers and in the same year introduced satellite-based mobile phones to service customers in remote areas beyond cell site territories, such as on ships and in the mountains.
1997 proved to be a critical year for DoCoMo. With success in its back pocket, DoCoMo and its parent company NTT believed all was well. However, Japan’s Fair Trade Commission ordered NTT to cut its 95% ownership of DoCoMo in the wake of financial crises in the area. The following year marked NTT DoCoMo’s IPO as the largest in the world at more that $18 billion, effectively reducing NTT ownership to 67%.
In 1999, DoCoMo took over the poorly performing PHS service from NTT. Revamping the service to target specific audiences, DoCoMo successfully resurrected the PHS market. In April of 1999, DoCoMo launched i-mode, the packetized, continuously connected wireless data service that has become the flagship product for the company.
By early 2000, DoCoMo had 27.1 million of the 49 million mobile subscribers in Japan. In March 2000, an analyst counted an average of 40 million daily page views at NTT DoCoMo vs. 70 million daily page views for Yahoo! Japan. At one point, the company was so overwhelmed with demand that it had to temporarily shut down its services.
The company is also immensely profitable. In the fiscal year ended March 31 2001, the company posted a record profit of $3 billion on revenues of $45 billion. This represented a 26% increase in revenues and a 45% increase in profit from the previous year. NTT DoCoMo’s market capitilization hovers around $335 billion.
DoCoMo’s success could be attributed to a combination of factors, but savvy marketing and strong leadership were two of the driving factors.
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