Businessmodel of NTT DoCoMo

Customer Segments

NTT DoCoMo principally operates as a mobile telecommunications provider, serving general consumers across multiple demographics and some commercial clients.

The Company operates only in Japan, where it is the leading mobile telecommunications network provider. In 2015 the Company had a market share of 43.6%. NTT DoCoMo does provide some international services, however, these do not comprise a significant portion of its revenue generating activities.

Value Propositions

NTT DoCoMo provides value to its customers through the quality and reliability of its network services, its brand standing and reputation, its commitment to research and development, and the accessibility of its multi-channel services.

NTT DoCoMo is Japan’s largest and most established mobile operator, operating as part of NTT Group, which has a strong reputation for quality within the Company. NTT DoCoMo commits a significant portion of revenue to research and development activities each year, and has a number of patents in place to ensure that it provides up-to-date solutions to its customers.

Channels

NTT DoCoMo operates a website at www.nttdocomo.co.jp, through which customers can find information on the Company’s products and services. The Company also operates an online store, the DoCoMo Shop, through which customers are able to purchase mobile handsets, devices and subscription plans. Additionally, NTT DoCoMo operates online music, book and video services through its dmarket portal, which is accessible through mobile and desktop browsers, and mobile applications.

Much of NTT DoCoMo’s sales are completed through its own direct sales teams. The Company operates a network of physical stores, and a number of sales offices. NTT DoCoMo has a recently established Sales and Marketing Division, which is responsible for revenues in the mobile and telecommunications sector, and formulating strategies to target individual customers within the mobile telecommunications field. Corporate sales are the responsibility of the Company’s devoted Corporate Sales Division. NTT DoCoMo’s Business Development Division is responsible for promoting the Company’s broadband services to both individual and commercial customers.

Customer Relationships

Many of NTT DoCoMo’s products and services are available to customers on a self-service basis through the DoCoMo Shop and the Company’s dmarket portal, including handset and mobile network subscriptions and on-demand services. The Company’s more complex services, notably its network system maintenance and development, require a greater degree of interaction and consultation with clients, in order to accurately fulfil their needs.

NTT DoCoMo makes a range of technical support resources available to customers through its website, including troubleshooting guides and user manuals. It also enables customers to make direct enquiries with the Company’s support staff in order to receive more personalised care. The Company operates several social media profiles, through which it is able to interact directly with customers.

Key Activities

NTT DoCoMo operates primarily as a mobile telecommunications provider.

Key Partners

NTT DoCoMo has a number of partnerships with operators within the telecommunications and technology sectors.

The Company has recently launched partnerships with a number of companies. In 2015 the Company entered into partnership with McDonald’s, under which McDonald’s agreed to provide discounts to the more than 54 million members of NTT DoCoMo’s “d POINT CLUB” at its network of 3,000 outlets in Japan.

The Company additionally launched a partnership in 2015 with Telefonica, with a view to providing Internet of Things solutions to multinational clients. NTT DoCoMo also has an Internet of Things tie-up with ThingWorx and Nippon Systemware in the provision of an M2M cloud solutions system powered by the ThingWorx platform.

Key Resources

NTT DoCoMo’s key resources are its technology, its telecommunications infrastructure, its IT infrastructure, its sales and distribution channels – notably its chain of retail stores, and its personnel. According to its annual report, NTT DoCoMo has more patents that are essential in the use of LTE than any other communications company in the world.

This includes a number of patent applications filed with the US Patent and Trademark Office, such as its applications entitled ‘Mobile station and radio base station’, ‘Wireless circuit and frequency pair determination method’ and ‘Enhanced inter-cell interference control in a radio communication system’.

Cost Structure

NTT DoCoMo incurs costs in relation to its research and development activities, its operation of its sales and distribution networks, maintenance and development of its IT infrastructure and communications infrastructure, and retention of its personnel.

NTT DoCoMo employs more than 25,500 members of staff, all of whom amount to costs in the form of salaries and benefits. The Company also operates a network of sales and administrative offices, as well as a chain of retail stores, which accrue costs in the form of rent and utilities.

Revenue Streams

NTT DoCoMo generates revenue through a range of services that can largely be divided into three categories:

• mobile and broadband communications services, including monthly connection charges, call charges, packet communication charges, broadband subscriptions and cable television subscriptions;
• equipment sales, including revenue from sales of mobile phone handsets supplied by third party manufacturers; and
• other services, including revenue from content services, payment solutions and device protection services. In 2015 NTT DoCoMo generated JPY 4.4 trillion in annual revenue, down marginally from JPY 4.5 trillion recorded in 2014. The Company’s telecommunications services account for the majority of the Company’s annual revenue, with voice revenue and packet communications revenue representing 20.2% and 42.3% of total 2015 revenue respectively.