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DoCoMo Clings to Its American Dream

Nobuhary Ono, president and CEO of NTT DoCoMo USA, the U.S. subsidiary of the Japanese wireless communications giant, is a key point man at a time when the company is facing major challenges. The value of its $9.8 billion, 16% stake in AT&T Wireless has plunged to a fraction of its purchase price, and it is facing heavy competition in its home market (see BW Online, 8/6/02, "DoCoMo's Weaker Signal in the U.S.").

On July 31, BusinessWeek Online reporter Olga Kharif checked in with Ono. Here are edited excerpts of their talk:

Q: Much has changed since you made your investment in AT&T Wireless. What's your strategy for the U.S. now?

A: DoCoMo USA has two objectives: First, since our parent company in Japan, NTT DoCoMo, has invested in AT&T Wireless, our mission is to support AT&T Wireless in implementation of its data service [such as video streaming over cell phones] in the U.S. and disseminating the service using our technology. The second mission is to find new technologies in the U.S. to take back to Japan and, if possible, implement here in the U.S.

Q: The share prices of a lot of wireless companies are on the floor. Is this a buying opportunity for foreign investors?

A: Wall Street people keep saying that the wireless industry is saturated, [because service providers now add fewer new subscribers than they had before]. But wireless penetration in the U.S. is less than 50%. I think there's a lot of room to increase that penetration rate to the level of other countries. I am not so pessimistic about the cellular industry here.

Q: Do you think this slowdown is just temporary?

A: Yes.

Q: What kind of changes do you expect to see in the U.S. wireless business? How will DoCoMo take advantage of these changes?

A: We expect big growth of the wireless market here. The wireless data market here is only a $200 million market. In Japan, it's almost an $8 billion market. We can expect much growth of the wireless data market in the U.S. by introducing attractive data services.

Q: What data services do you expect to be popular in the U.S.?

A: U.S. cellular operators are striving to gain business users. But, actually, in Japan, we've opened the doors of the consumer market by introducing our data service, called i-mode. We can provide that kind of consumer-oriented new services here.

Q: When you compare the Japanese and the U.S. markets, do you expect to see many differences in the types of services that are popular?

A: Wireless data is good for providing news or entertainment content. Many people would say that, while people's tastes and culture here are slightly different from those in Japan, people here still love music and sports. These same services have very big potential here in the U.S.

Q: Do you foresee your relationship with AT&T Wireless changing if/when that company merges with another wireless service provider?

A: I don't know what will happen in the future. But we'd like to keep good relations with [AT&T Wireless].

Q: Do you think you made a mistake by investing into AT&T Wireless?

A: In the long run, we expect the price of the stock to increase.

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