DoCoMo Seeks to Boost Shares via Its Biggest Roadshow
Tokyo, Sept. 4 (Bloomberg) -- NTT DoCoMo Inc., Japan's largest cellular phone operator, is making a bid to gain investors' confidence in its stock through its biggest-ever roadshow, starting today in the U.S., Europe and Japan.
NTT DoCoMo -- which fell as much as 75 percent from a high of 4.52 million to a low of 2.59 million so far this year -- will deploy a third team, from two previously, to make presentations to investors in major cities to convince them that its fledging overseas expansion is on the right track, said Hirotaka Sato, head of DoCoMo's investor relations.
The eight-year-old company, which is gearing up for overseas expansion, has fallen 31 percent in the past six months, making it the 15th worst performer on the Nikkei 225 stock average. The decline is partly on investors' concern that the company won't make back what it spends on overseas expansion and as subscription growth slows in Japan.
``DoCoMo must be really concerned about its stock price,'' said Hideaki Kurimoto, a portfolio manager at Meiji Dresdner Asset Management Co., which manages 300 billion yen. ``If its market capitalization falls further, that will affect its strategy for overseas acquisition.''
The roadshow comes as Japan's largest company by market value is expected to issue new shares next year to raise money for further overseas expansion, some analysts said. DoCoMo hasn't confirmed whether that's the case.
Expansion
The offspring of Nippon Telegraph & Telephone Corp., the world's largest phone company, has spent 657.4 billion yen ($6.1 billion) to take minority stakes in foreign operators including Hutchison Telephone Co., Hong Kong's largest mobile phone company, Dutch's KPN Mobile NV and Hutchison 3G UK Holdings Ltd., which will operate high-speed cellular phone service in the U.K.
DoCoMo says it needs to buy foreign carriers to push W-CDMA globally -- that's wideband code division multiple access -- for high-speed cellular phone service. The technology will allow users to make phone calls and send data from the same handset anywhere. Currently users are required to use different handsets if they travel, as each region uses different cellular phone technology.
Investors, though, are also concerned whether DoCoMo will make money on the high-speed service it's planning to start in Japan in May, analysts said.
``DoCoMo needs to convince investors why it has to be on the offensive to push W-CDMA,'' said Hironobu Sawake, senior analyst at ING Barings Securities (Japan) Ltd. ``If it doesn't, it will lose ground to a rival standard.''
Qualcomm Inc. of the U.S. is also pushing telephone companies to use its cdma2000 standard for high-speed phones.
DoCoMo has said it plans to invest $10 billion to develop high-speed cellular phone service throughout Japan in the three years from May 2001. DoCoMo hasn't given any estimates of how much it will cost to develop the service overseas.
Current Price
DoCoMo's Sato says the current stock price doesn't reflect the company's fundamental strength, citing the growth in its mobile Internet subscribers. DoCoMo's i-mode service claims 11 million users since its February 1999 start, a much faster pace than the company's original forecast. DoCoMo had expected it to take three years to sign up the first 10 million users.
By last month DoCoMo accounted for 31.6 million, or 58 percent, of Japan's 54.4 million cellular phone users.
While i-mode accounts for just 1 percent of DoCoMo's group sales, the company's first foray into Internet access over mobile phones is thought to be a trial for high-speed cellular phone services, so-called third-generation phone service.
The upcoming roadshow is DoCoMo's third since its stock started trading publicly on the Tokyo Stock Exchange in October 1998. The company also visited the U.S. and Europe in October last year.
On the roadshow, DoCoMo President Keiji Tachikawa will meet investors in New York, Boston and London. Chairman Kouji Ohboshi and Kiyoyuki Tsujimura, a managing director for DoCoMo's overseas business, will meet Japanese investors and also those in European cities including Frankfurt, Amsterdam and Paris.
DoCoMo shares rose 90,000 yen, or 3.2 percent, to 2.89 million.
Sep/04/2000 5:56 ET
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