From: Rohit Khare (email@example.com)
Date: Tue Feb 22 2000 - 12:18:58 PST
NTT DoCoMo Sets The Mobile Internet Standard
February 15, 2000With more than 4 million users, i-mode -- NTT
DoCoMo's mobile data platform -- is the world's leading mobile
Internet service. i-mode's success validates DoCoMo's open-access
business model and sets the bar for other operators' mobile Internet
This week marks the one-year anniversary of the launch of i-mode, NTT
DoCoMo's packet-based mobile data service. To get a progress report,
Forrester recently spoke with Takeshi Natsuno, executive director of
i-mode. Here's what we learned:
* Consumers are flocking to i-mode. This past Christmas, i-mode
passed the 3 million-subscriber mark. Today, i-mode counts more than
4 million users, with 150,000 new customers signing up each week. In
the span of less than one year, i-mode has exceeded even the largest
fixed-line ISPs, like Japan Telecom, to become the largest ISP in
* i-mode sites proliferate. Thousands of content and
applications providers have joined the i-mode network. More than 320
providers are i-mode Application Alliance Partners and have their
sites featured on the official i-mode home page. In addition, more
than 5,500 providers have independently developed tailor-made HTML
sites that can be accessed from any i-mode handset.
* Content and applications abound. With thousands of content
providers onboard, i-mode offers a wide array of mobile data
services, like news, weather, mobile banking and trading, travel and
ticket reservations, and downloadable games and ringing tones.
I-MODE DRIVES HUGE GAINS FOR DOCOMO
i-mode has had a tremendous bottom-line impact on DoCoMo's business.
The mobile operator has seen gains from:
* New data fees. i-mode users pay a $3 flat monthly fee for
unlimited access to mobile data services. Additional charges are
applied on a per-packet basis. With the average subscriber racking up
$9 per month in data usage fees, i-mode users generate a total of $12
per month in data revenues for DoCoMo.
* Billing and collection commissions. When content providers
choose to charge users pay-per-use fees -- as Bandai has done with
its cartoon character downloads -- they employ DoCoMo's billing
service. The charges appear on the user's mobile bill, and the
provider pays DoCoMo a 9% gross commission. Although pay-per-use
content accounts for only 20% of all i-mode content, 70% of i-mode
users subscribe to these services, generating an additional $1 per
customer per month in billing and collection commissions for DoCoMo.
* Additional voice minutes. The average DoCoMo subscriber
spends $80 per month on voice calls. But with "call now" promotions
on i-mode content sites stimulating voice calling, voice revenues for
i-mode users have increased by 12.5%, to $90 per month.
* Lower churn rates. i-mode's differentiated and personalized
services keep customers from defecting to rival mobile operators DDI
and IDO. The churn rate for i-mode subscribers is about half that for
voice-only DoCoMo subscribers.
DOCOMO SETS THE STANDARD FOR OTHER MOBILE OPERATORS
I-mode's success can't simply be chalked up to Japan's low PC
penetration and its gadget-crazy culture: DoCoMo's shrewd business
model is responsible for attracting a critical mass of content and
users. Mobile operators in Europe and North America should follow
DoCoMo's lead and focus on:
* Championing open access. DoCoMo's decision to let any site
join the i-mode network and not charge content providers for premier
placement on the i-mode portal has attracted thousands of content
providers -- which, in turn, has attracted millions of users. Instead
of creating closed gardens of proprietary content, mobile operators
like SFR and Omnipoint should embrace open access to realize the same
positive feedback cycle and swell their mobile data customer base.
* Managing consumer expectations. DoCoMo has been very careful
to not market i-mode as "The Internet on your phone." Instead, i-mode
is positioned as a new, advanced wireless service. By branding i-mode
as a unique mobile experience, DoCoMo has prevented consumers from
expecting flashy Internet graphics on their phones -- and walking
* Growing core revenues. DoCoMo doesn't generate any revenues
from mobile advertising or transactions executed on i-mode. Instead,
it focuses on increasing network revenues like airtime fees.
Forrester believes that other mobile operators should follow suit and
stick to their core competencies: building wireless networks and
growing their subscriber bases. Operators that bank on huge windfalls
from advertising or sales commissions will be disappointed as online
brokers like Charles Schwab will be reluctant to pay per-transaction
fees to operators like Sprint PCS.
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