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DoCoMo predicts four survivors in European mobile market



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Jan 15, 2003 (Datamonitor via COMTEX) -- NTT DoCoMo Inc is predicting that
Europe can only support four mobile operators at most, and has signaled its
willingness to invest in one of the survivors, despite being badly hit
financially by its overseas expansion policy.

In an interview with the Financial Times, DoCoMo president Keiji Tachikawa said
he believes that "in Europe as a whole, there can be four operators at most.
Europe has to go through realignment", which he predicted would take place
sometime this year, once the operators have dealt with their financial
difficulties.

Tachikawa also indicated that DoCoMo would prefer a tie-up with an equity
investment with a European partner. This is despite DoCoMo being forced to write
off a massive JPY1,489bn ($12.6bn) due to the bursting of the telecom bubble.
DoCoMo had bought stakes in AT&T Wireless, Hutchison 3G and KPN Mobile at a time
when wireless carriers were riding high on world stock markets. With growing
doubts over the prospects for 3G, values slumped and DoCoMo was criticized for
buying stakes too small to exert an influence over its overseas partners, yet
sufficiently large to have painful financial effects when the market slumped.

DoCoMo also saw its stake in its main European partner, KPN Mobile, diluted from
15% to 2.2%, after the carrier issued new shares to its parent in a debt for
equity swap.

Tachikawa, the man who oversaw the international expansion of DoCoMo, conceded
that there have been mistakes, but insisted that DoCoMo remains committed to a
strategy of overseas expansion. He listed four likely scenarios for overseas
expansion, namely friendly partnership, technical alliance, minority investment
and majority investment.

It is not clear who would be in the top four, apart from Vodafone Group Plc,
which from a strategic and financial point of view occupies a healthy market
position in Europe. This is despite some problems in the French market, where it
lost out to Vivendi Universal SA over control of Cegetel SA, and hence France's
second largest mobile phone operator SFR SA.

Source: Computerwire


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