Breaking News

Tweet TWEET

DoCoMo Set to Resume Phone Investing After Softbank Move

Photographer: Akio Kon/Bloomberg

Kaoru Kato, president and chief executive officer of NTT DoCoMo Inc., is seeking additional income from health and retail services as Japan’s shrinking population and market saturation. Close

Kaoru Kato, president and chief executive officer of NTT DoCoMo Inc., is seeking... Read More

Close
Open
Photographer: Akio Kon/Bloomberg

Kaoru Kato, president and chief executive officer of NTT DoCoMo Inc., is seeking additional income from health and retail services as Japan’s shrinking population and market saturation.

NTT DoCoMo Inc. (9437), Japan’s largest wireless carrier, is ready to return to investing in phone companies outside Asia after rival Softbank Corp. (9984)’s deal to acquire a majority stake in Sprint Nextel Corp. (S) in the U.S., its chief executive officer said.

“The acquisition plan of Sprint was quite astonishing for us,” Kaoru Kato, 61, said in an interview at the Mobile World Congress in Barcelona yesterday. “I hope this will lead to success for the U.S. market and for Softbank as well, but the hurdle will be very high.”

DoCoMo, based in Tokyo, has scaled back bets on non-Asian phone companies after earlier investments in Royal KPN NV (KPN) and the company then known as AT&T Wireless Services Inc. (T) led to writedowns a decade ago. Kato, who took over as CEO in June last year, is now seeking additional income from health and retail services as Japan’s shrinking population and market saturation limits growth in its main wireless operations.

While DoCoMo has recently focused on acquiring content and platform providers, making acquisitions in the mobile industry may be worthwhile as the sector “is characterized by constant growth,” Kato said. Last year, DoCoMo acquired Buongiorno SpA, an Italian mobile-content provider, for about 260 million euros ($340 million).

Photographer: Kiyoshi Ota/Bloomberg

An attendee uses his mobile phone as he looks at the selection of NTT DoCoMo Inc.'s new smartphones and tablet devices during a product launch in Tokyo. Close

An attendee uses his mobile phone as he looks at the selection of NTT DoCoMo Inc.'s new... Read More

Close
Open
Photographer: Kiyoshi Ota/Bloomberg

An attendee uses his mobile phone as he looks at the selection of NTT DoCoMo Inc.'s new smartphones and tablet devices during a product launch in Tokyo.

“We will constantly monitor the trends, and if there is anything good, we may make an investment,” Kato said.

Minority Stakes?

DoCoMo, controlled by Nippon Telegraph & Telephone Corp. (9432), fell 0.7 percent to 142,700 yen in Tokyo. The stock has gained 15 percent this year, valuing the carrier at 6.23 trillion yen ($68 billion). Softbank has a market value of 4.06 trillion yen.

Kato said his company won’t necessarily stick to minority investments as it has traditionally done. DoCoMo had 340 billion yen in cash and cash equivalents as of Dec. 31, according to company filings. The CEO wouldn’t specify the size of its budget for potential acquisitions, nor would he discuss specific regions DoCoMo is looking at.

The CEO also declined to say whether DoCoMo plans to use put options to sell its 26 percent stake in Indian operator Tata Teleservices Ltd.

Japanese telecommunications companies have announced acquisitions totaling $47.4 billion over the past 12 months, according to data compiled by Bloomberg, compared with $6.5 billion a year earlier. Softbank agreed in October to buy about 70 percent of Sprint, the third-largest U.S. mobile-service provider, for $20.1 billion.

Photographer: Kiyoshi Ota/Bloomberg

The logo of NTT DoCoMo Inc. is seen beyond visitors during the company's product launch in Tokyo. Close

The logo of NTT DoCoMo Inc. is seen beyond visitors during the company's product launch in Tokyo.

Close
Open
Photographer: Kiyoshi Ota/Bloomberg

The logo of NTT DoCoMo Inc. is seen beyond visitors during the company's product launch in Tokyo.

DoCoMo hasn’t yet decided whether to offer Apple Inc. (AAPL)’s iPhone, Kato said. The Cupertino, California-based company’s closed ecosystem makes it harder to integrate into DoComMo’s plan to link devices and services, he said.

To contact the reporter on this story: Cornelius Rahn in Barcelona at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.