Shareholders pan DoCoMo's overseas spending
Thursday June 20, 4:54 AM EDT
TOKYO, June 20 (Reuters) - Unhappy shareholders on Thursday lashed out at NTT DoCoMo Inc for its soured overseas investments, but the Japanese mobile phone giant dug in its heels and stuck by its global strategy.
At DoCoMo's annual shareholders' meeting, about 900 investors gathered to demand an explanation from the company for its skimpy net profit of 862 million yen ($6.96 million) in 2001/02, after a write-down of 813 billion yen on its overseas investments.
"I don't think the management has taken full responsibility," said one shareholder, drawing applause from the audience. "I spent my retirement money to buy six shares. I've lost so much."
On Thursday, the stock ended unchanged at 294,000 yen ($2,373), off 21 percent from a year high marked in April.
After launching its i-mode Internet mobile service in 1999 to deliver news and entertainment, DoCoMo took minority stakes in several foreign wireless carriers to promote its technolgy and lay the foundations for third generation mobile services.
The total investments have amounted to more than one trillion yen, and DoCoMo still plans to spend more, in particular to form partnership with carriers in Asia.
"It's necessary to make overseas investments to cope with the globalisation of the mobile phone market," Yoshinori Uda, DoCoMo's vice president, told the shareholders.
"We will continue investments otherwise we won't be able to survive and may miss a growth opportunity," he added.
Uda stressed that DoCoMo could help its foreign partners enhance their corporate value by giving its i-mode expertise to them, which would benefit DoCoMo in the long run.
DoCoMo said its partner Dutch telecoms group KPN (KPN) had launched the i-mode service in Germany in May and the Netherlands in April, so far garnering 34,000 subscribers. Some shareholders voiced concern about DoCoMo's poor performance in capturing new users in May, when it fell behind KDDI Corp's (9433) mobile unit "au" and J-Phone, controlled by Japan Telecom Co (9434) and Britain's Vodafone Group (VOD) for the first time.
"It looks to me that DoCoMo has become too content with its dominant position in the market," one shareholder said. Hideki Nomura, a DoCoMo board member, said the low subscription growth in May was due to a lack of new models, and that DoCoMo would probably come back to clinch top spot in June with new handsets rolled out in May and June.
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