Money Matters - Simplified

DoCoMo, iPhone pact still not in sight

NTT DoCoMo Inc, Japan's largest mobile provider is one of the few companies among the world's leading mobile carriers not offering Apple Inc's iPhone to its customers.

NTT DoCoMo Inc, the mammoth Japanese mobile provider is one of the few telecom providers to have bucked the trend of jumping on to the iPhone mania.

Telecom companies have gone, kind of, head over heals to ink a pact with Apple Inc’s smashing hit iPhone. DoCoMo, which boasts of 60 million customers, has however not followed suit.

The Shibuya, Tokyo based telecommunications player is content with its leadership position. As a business strategy, it provides a gamut of services on its own smartphones.

Own Set of Features
So far, requests from customers and employees alike to enter into an agreement with Apple Inc have fallen on deaf ears. NTT DoCoMo refuses to relent on this issue.

"We're trying to develop a lifestyle system," NTT DoCoMo CEO Kaoru Kato said of the company strategy.

The gamut of features that DoCoMo offers is indeed large. The big question though is; Is it enough to counter the iPhone?

Experts opine that some of the features may be redundant.

"Its photo service, for example, is very difficult to use and I'm not sure anyone still bothers in the age of Instagram and Flickr," said Hiroshi Yamashina, senior telecoms analyst at BNP Paribas.

Number One Position At Stake
The largest telecom provider in Japan has had to pay a heavy price for giving a cold shoulder to iPhone. In the last four and half years as many as 3.2 million subscribers have churned. Needless to say, the other players in the country have accepted these customers with open arms.

If the churn is not arrested at the earliest, DoCoMo may well lose its numero uno position in the country. A simple philosophy of business is to adapt to change. So far, the company has not been able to cater to the set of customers who are being termed as the ‘iPhone Generation’.

"Unit sales are doing quite well this year but they're still losing customers to other networks. If that's the case then they really have no choice but to go for the iPhone,” opined Yamashina.

Looking at sheer numbers, DoCoMo’s strategy seems strange. The iPhone has garnered 42 percent market share of the Japanese smartphone market.

But then, contractual obligations are pretty demanding from both parties which are probably acting as a stumbling block in the iPhone, DoCoMo alliance. Style conscious Apple Inc reportedly does not want the DoCoMo logo on the handsets even as it demands that iPhones make up half of DoCoMo’s handset sales.