Meaning "everywhere" in Japanese, DoCoMo (or NTT DoCoMo) is Japan's leading wireless communications operator (1) and arguably the world's most successful mobile Internet provider. Started in February 1999, DoCoMo's legendary i-mode (information mode, a 2G/3G mobile-Internet platform) had attracted 40 million users in Japan plus 1 million subscribers in Europe and other parts of Asia by the end of January 2004. (2) Launched in 2001, DoCoMo's FOMA (freedom of mobile multimedia access) service is the first fully commercialized 3G network in the world, with more than 3 million users in March 2004. (3) The commercial success of DoCoMo has many social ramifications as it provides a new technological tool that assists, enhances, and alters the ways in which people interact, conduct their lives, and coordinate themselves in time and space. It is the purpose of this review to summarize the basic information about DoCoMo, its history, how it works, why it succeeds, and how the mutual shaping between technology and society takes place, giving rise to a fascinating keitai (mobile phone) culture that is central to the understanding of the transitional information society in contemporary Japan. A brief history The start of NTT's mobile phone operation dates back to December 1979 when car telephone service became available in Tokyo on rental basis. In August 1991, the mobile communications division of NTT was incorporated as a provisional company with a capitalization of 1 billion yen (about US$ 80 million). (4) And in July 1992, DoCoMo was formally established as a separate business entity, i.e. NTT Mobile Communications Network, Inc., which handles all of NTT's mobile operations and sales activities. Before the start of i-mode in February 1999, the company launched its digital cellular phone service in 1993, its packet data communications service in 1997, and took over personal handyphone system (PHS) business from NTT Personal Group. It was also first listed on the Tokyo Stock Exchange in October 1998. (5) NTT DoCoMo offers a wide range of wireless services from pagers to satellite phones, from PHS to in-flight telephones. I-mode, the service that DoCoMo is most famous for, was launched in February 1999 to create a "truly ubiquitous mobile Internet." (6) The initiation of i-mode was in part a result from DoCoMo's listing on the Tokyo Stock Exchange with a critical timing in the immediate aftermath of the Asian financial crisis. According to Lightman and Rojas, the main motive for this new initiative is to maintain and increase the average revenue per user (ARPU), the key indicator financial analysts use to evaluate a telecom firm. Before 1999, DoCoMo's ARPU had been dropping from more than JPY 18,000 in 1994 to less than 9,000 in 1998. (7) Yet since the launch of i-mode, "NTT DoCoMo seems to have found a way to offset the decline in voice-based ARPU by maintaining robust subscriber growth and by introducing a new service, i-mode." (8) The boost effect of wireless data service has been evident by comparing i-mode with voice-only mobile services. (9) The development of NTT DoCoMo (10) July 1992
NTT Mobile Communications Network, Inc. takes over Nippon Telegraph and Telephone Corporation's mobile communications business
March 1993
Launches digital cellular phone service
March 1997
Launches packet data communications service
October 1998
Listed on the Tokyo Stock Exchange
December 1998
Takes over Personal Handyphone System (PHS) (11) business from NTT Personal Group
February 1999
Launches i-mode service
March 1999
Discontinues analog cellular phone service
April 2000
Changes corporate name to NTT DoCoMo, Inc.
May 2001
Launches FOMA service on introductory basis
October 2001
Launches FOMA service on fully commercialized basis
March 2002
Listed on the London Stock Exchange and New York Stock Exchange The genesis of i-mode, however, was unlike all previous services launched by NTT, the former national telecom monopoly that "has always been driven by engineers and bureaucrats." (12) In this conservative corporative culture, work assignments in DoCoMo were once viewed "as a sort of exile" during the early 1990s due to the primitive cellular technology of the time and the slow-moving market. (13) But in 1996, Koji Oboshi, then president of DoCoMo, foresaw strong market demand for non-voice communications. (14) He then appointed Mr. Keiichi Enoki as head of the Gateway Business Department (GBD), the mobile data service taskforce, in January 1997. (15) Enoki turned out to be one of the main founders of i-mode. A senior NTT executive, Enoki proceeded to build a new organization by recruiting talents from different NTT departments and, notably, from outside NTT, which was quite unusual in Japanese corporative culture. In so doing, he created a highly innovative organizational force that "has an entrepreneurial spirit and consists of different types of personnel." (16) The GBD has a core staff of 70 including two notable "outsiders." Ms. Mari Matsunaga joined the team after editing Recruit, a classified-ad magazine, for 20 years. She did not know much about the technologies of cell phones or the Internet. But her marketing genius proved to be essential to the success of i-mode. (17) The other key "outsider" is Mr. Takeshi Natsuno, who used to run an Internet venture company. Together with colleagues, Natsuno adjusted DoCoMo's existing network to Internet Protocol (IP) packet-standard technology, which was essential to DoCoMo's rapidly growing alliance with online content providers. (18) Since the launch of i-mode in February 1999, its subscriptions grew to 4 million in February 2000, to 20 million in March 2001, and then to 30 million in December 2001. (19) The number of i-mode subscribers was 40.5 million in March 2004, representing 59.3 percent of all cellular subscriptions in Japan. (20) This market dominance was achieved in spite of growing competition in both the urban and rural areas. In a historical view, this is a dramatic turnaround from the analog era when DDI Cellular had greater than 50 percent of the subscribers in most regions in which it operated. (21) (Figure 1: See NTT DoCoMo figures on group subscribers) I-mode operates on two types of networks: the existing mova 2G network that still accounts for the majority of i-mode subscribers and the FOMA 3G network (using W-CDMA) launched in 2001. Worldwide, this is a rather unique development because most nations follow the migration path via so-called "2.5G" technologies. (22) Moreover, the commercial viability of the low-speed 2G network (9.6 kbit/s) challenges the conventional wisdom that new mobile Internet services cannot grow and succeed without high-bandwidth network standards. (23, 24) The reach of i-mode has gone beyond the confinement of gender and age. Although males are more likely than females to subscribe, especially to FOMA 3G services, more than one-third of i-mode subscribers are female. (25) While DoCoMo's popular image is often associated with young consumers, people over 30 years old still constitute more than half of i-mode's consumer base. (26) Yet if the two types of networks are separated, people aged more than 30 would represent 67.2 percent of all mova 2G subscribers, whereas the percentage for FOMA 3G subscribers is only 50.1 percent. Unsurprisingly, the younger generations and males are still more likely to subscribe to 3G services, which was true for not only i-mode subscribers but also the total population of Japanese mobile Internet users at large. (27) (Table 1: See NTT DoCoMo figures on breakdown of i-mode subscribers by age/sex) Not all customers of i-mode are human beings. With the development of m-commerce, smart handsets can already communicate with vending machines to purchase Coca-Cola. (28) Dr. Keiji Tachikawa, DoCoMo's current president, predicted that there would be about 360 million subscribers by the year 2010, of which two-thirds would be non-human users such as cars, bicycles, portable PCs, pets, and vending machines. (29) How it works According to Barnes and Huff, "An i-mode-enabled phone typically weighs approximately 90 grams (3.6 ounces), has a comparatively large liquid crystal display (LCD), and a four-point command navigation button that allows the user to manipulate a pointer on display. The user connects to the i-mode service by pressing a single button." (30) From there, s/he can reach tens of thousands of websites via the i-menu portal page. (31) The most popular i-mode platform is Compact NetFront, developed by a Japanese company called Access and used by three-quarters of all i-mode devices. (32) I-mode enables users to access customized Internet content over a packet-based network. (33) Web content for i-mode is developed using compact hypertext markup language (cHTML), a subset of HTML. The i-mode system does not use the open source WAP but uses instead a special set of simplified HTML tags, which are closer to traditional Web formatting than the early days of WAP's WML. (34) It has been quickly adopted among consumers and content providers although reportedly cHTML is also "sub-optimal for the delivery of the next generation of multimedia services" and it may suffer from poor navigation like WAP. (35, 36) Since the launch of FOMA in October 2001, DoCoMo has been providing an enhanced i-mode for 3G users, known as "i-motion." (37) This service offers short audio and video content transmitted over the carrier's packet-based network. I-motion content can also be distributed using conventional Web servers. On the i-mode server, there are both "official" and "unofficial" content sites. (38) For official sites, there is a contractual arrangement between DoCoMo and the content provider under which DoCoMo collects the content charge and keeps a commission of 9 percent while forwarding the rest onto the content provider. This has provided tremendous incentives for the development of compelling local content. In the case of "unofficial" Web sites, users must pay the owner of the content directly. Unofficial sites that charge for access are therefore rare, given that electronic payment methods in Japan are limited and few credit cards are in circulation. In April 2002, i-mode users had access to over 3,000 official content sites and 53,000 unofficial sites. An average DoCoMo subscriber pays about 6,000 yen (US$ 50) per month. (39) The network structure centralized to i-mode's content server and gateway enables revenue generation from multiple sources. According to ITU, "The i-mode billing model is straightforward and fairly equitable. Because i-mode uses a packet-based network for data transmission, mobile phone users are billed according to the volume of data they download: each packet, or 128 bytes, costs JPY 0.3 (0.2 US cents). In addition, they are charged a subscription fee of JPY 300 (2.41 USD) per month for access to official sites. Some content providers charge an additional fee of JPY 200-300 per month. In the case of official sites, DoCoMo bills the user directly and keeps a 9 percent commission fee, while forwarding the rest to content and application developers. As mentioned earlier, this has helped spur the content market." (40) An itemized list of these various revenue sources is provided below: -- Monthly subscription fee
-- Airtime usage charge
-- Packet usage fee (42)
-- 9 percent commission on e-commerce transactions
-- 9 percent maintenance charge for ICP (Internet content provider) tenants This effective billing system with built-in revenue-sharing agreement with ICPs has been widely regarded as a key to i-mode's success. (43) By virtue of its market share DoCoMo also holds great bargaining power and close cooperation with device manufacturers such as Matsushita and NEC who provide, among other features, direct access buttons to i-mode on their latest handsets. (44)
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