President of NTT questions growth prospects of NTT DoCoMo's Internet service.
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Nikkei English News via NewsEdge Corporation : By Peter Landers
Staff Reporter of The Wall Street Journal
TOKYO -- The president of Nippon Telegraph & Telephone Corp. questioned the growth prospects of his mobile-phone subsidiary's popular Internet service and said the subsidiary should stay in the NTT group to take advantage of synergy between Internet services on mobile devices and conventional phone lines.
Junichiro Miyazu also disclosed some details of NTT's closely watched international strategy,
saying he hopes to buy an international Internet service provider and plans to focus on U.S. companies before European companies. NTT, formerly a state-owned monopoly limited to Japanese domestic service, was allowed into the international business last July.
NTT's mobile unit, NTT DoCoMo Inc., has emerged as the crown jewel of the NTT group, thanks to the rapid growth of mobile phones in Japan and of DoCoMo's i-mode service, which enables users to send e-mail, trade stocks and check sports scores on their mobile phones. The service has attracted six million users, about one in 20 Japanese, in just 14 months.
The surge has overloaded NTT DoCoMo's systems and led to frequent breakdowns. NTT DoCoMo said Thursday it would halt i-mode advertising for a time and cut in half the number of i-mode handsets delivered to sales agents while it installs more computers to deal with the crush of data traffic.
But Mr. Miyazu said in an interview that he didn't think mobile devices such as i-mode phones
would become the prime means for accessing the Internet.
"When it comes to people my age, the screen is too small. To be honest, I don't feel any desire
to use it," said Mr. Miyazu, who is 64 years old. "It seems to me the most natural terminal would
be some extension of the television or the PC. I don't think [the i-mode phone] is going to be the
main Internet terminal."
Mr. Miyazu also suggested that the potential for Internet-enabled mobile phones might be smaller outside Japan. "It's certainly a hit in Japan, among young Japanese. But if you take that around the world, is that kind of setup really going to be a smash hit? . . . The buttons are small. You have to press them all with your thumb. It's hard to use unless you've got a fair amount of dexterity."
The NTT holding company headed by Mr. Miyazu currently holds 67.1% of NTT DoCoMo. While
analysts and politicians have discussed giving DoCoMo more independence, Mr. Miyazu said both he and DoCoMo executives now believe the NTT group should stay together to offer Internet users one-stop shopping.
"DoCoMo has begun to think that rather than going out all by themselves and just doing wireless, it's actually to their advantage to stay within the group and make a general strategy with the fixed-line side," Mr. Miyazu said. NTT DoCoMo was increasingly becoming a provider of services over the Internet, and so would want its customers to have access from a variety of devices including those connected to regular telephone lines controlled by NTT proper, he said.
Turning to international strategy, Mr. Miyazu said NTT needs to pursue alliances and acquisitions to make up for its late start. "You're seeing a lot of Internet providers emerging who cross international boundaries. I think we're going to buy one of those at some point," he said.
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Its nice to know DoCoMo has such enthusiastic support for its wireless internet efforts from the head of NTT.- DPR
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