NTT DoCoMo expects Asia to lead investment next year

NTT DoCoMo expects investments in Asian mobile operators to lead its overall investment during the coming financial year, the company’s president said Thursday.

“Perhaps the largest area of investment is international-related investment,” said Masao Nakamura, president and CEO of NTT DoCoMo, speaking at the Foreign Correspondents’ Club of Japan. The carrier’s financial year runs from April until March.

“We try to enter into Asian markets for the expansion of the I-mode service, and thereby try to reduce our cost by increasing the volume of procurement with local partners,” Nakamura said.

“Of course, it would be best if we can rely on the method we used for the introduction of I-mode in Europe. Namely, just forming a technical partnership without any investment would be best. But in the case of Asian operators, there are some operators that seek investment and that is sometimes a condition for the introduction of I-mode in these markets,” he said.

On Tuesday, NTT DoCoMo completed a deal to acquire a 7% stake in Philippine Long Distance Telephone Co. PLDT offers cellular services in the Philippines through its Smart Communications subsidiary. As part of NTT DoCoMo’s investment, the operator will roll out I-mode services in the Philippines.

In December, NTT DoCoMo said it would pay 565 billion won ($573 million) for a 10% stake in KTF Co., South Korea’s second-largest cellular carrier, with a view to expanding KTF’s Wideband Code Division Multiple Access network, which doesn’t cover the entire country. NTT DoCoMo operates a WCDMA network in Japan, and a stronger network in South Korea would enable it to offer better roaming services.

The two deals are the first major international acquisitions that NTT DoCoMo has made since the end of the dot-com and telecommunications bubbles.

During that period of rapid market expansion, NTT DoCoMo made a string of overseas investments but was forced to write off billions of dollars after the stock prices of its partners dropped sharply. Those investments, which included AT&T Wireless, Taiwan’s KG Telecom and Hong Kong’s Hutchison, were aimed at spreading WCDMA 3G and its I-mode wireless Internet technology worldwide.

Nakamura also confirmed that the company plans to begin offering High Speed Downlink Packet Access technology in Japan in the second quarter of the new fiscal year, from July to September.