Disruptive technologies and competition to undermine the hegemony of NTT DoCoMo

Financial Times reports (January 25, 2007) that “DoCoMo is forecasting a small drop in operating profit this fiscal year.” There are several directions from which the giant feels uneasiness. First comes the number portability that sparkled a price war initiated by Softbank (ex-Vodafone). It also became clear that another DoCoMo’s rival – KDDI au was the biggest winner so far from number portability. Number portability combined with Japan’s traditional fat handset subsidies, of about $300-$350 a piece, alone could affect the profitability. To continue the list of disruptions, FT lists:

• Arrival of fixed/mobile convergence (meaning more bundling);
• Small operators bringing in Skype-type services; and
• Further regulatory changes.

The question remains whether operators such as NTT DoCoMo accept their utility-like (dumb pipe) status or successfully fight off the trend with counter measures. So far, the indications are that they are going for a big fight.