DoCoMo struggles to regain vision
By HISASHI KAMIO, Special to The Asahi Shimbun
Stung by the rejection of its Foma service, the mobile phone giant must shed its bureaucratic mindset to spur innovation.
With a recent spurt of improved handsets, NTT DoCoMo Inc. has managed to regain some momentum from rivals who were upstaging it with sexier phones and advanced technology.
But if it is to reassert itself as the unchallenged visionary in the mobile market, it has to lose what insiders describe as a bureaucratic tunnel vision that has been inhibiting innovation and squashing debate about business direction.
While DoCoMo relied on its i-mode cash cow when focusing on its unpopular third-generation (3G) Foma service, J-Phone Co. and KDDI Corp. brought out hit 2G handsets equipped with cameras and global-positioning system (GPS) functions. Though DoCoMo had a lead in mobile GPS technology, it failed to bring any GPS handset to market.
Meanwhile, Foma promoters made some tactical errors. They assumed, wrongly, that people would put up with technical glitches and such problems as a short battery life in return for the high-speed downloading capabilities of Foma.
They also failed to foresee the threat from high-speed ADSL Internet access, which was growing rapidly long before Foma was launched commercially last October.
``When we were planning Foma, our initial prediction was that mainstream fixed-line Internet access would top out at 64 kilobits per second for ISDN and that fiber-optic lines would spread from around 2003 to 2005,'' said DoCoMo's Hikaru Kawachiyama. ``If that had been the case, Foma's maximum speed of 384 kbps would have been the fastest for personal use, so we were expecting to win a huge market share. However, ADSL has become a hit, diminishing the impact of Foma.''
There is a widely held feeling within DoCoMo that Foma services were obstinately launched under poor conditions-demand wasn't clear, the system was immature and unstable, and the info-tech bubble was collapsing around the world.
Other carriers were cautious, postponing or comprehensively reviewing 3G cellular phone plans.
A DoCoMo employee said in March 2001 that a Foma had taken on a life of its own because it was considered an untouchable project within the company.
Boasting that it would be the world's first firm to offer 3G cellular phone services, DoCoMo spent lavishly on research and development, capital investment and overseas preparations to pave the way for global sales. Total spending is estimated to exceed 4 trillion yen.
Some staff understood the need for caution, but the Foma juggernaut had started rolling and the atmosphere was not conducive to naysayers, said one worker.
As a result, Foma was a bug-ridden service at the time of its first projected launch on May 30, 2001. DoCoMo was quickly forced to recast the service as a trial offering. DoCoMo President Keiji Tachikawa tried to put the best possible spin on events.
``We have just changed how we're offering services, and I don't consider that a postponement,'' he told reporters. ``We will write in the company history that DoCoMo's third-generation cellular phone service began on May 30.''
His remarks were interpreted to mean no interruptions would be tolerated.
But why was an obsession with a big project allowed to cloud executive thinking? Off-the-record interviews with DoCoMo employees reveal a feeling that the company is becoming overly bureaucratic.
Despite its outstanding technological and financial capabilities, it appears DoCoMo is no longer able to come up with exciting new products like i-mode.
One source said the corporate atmosphere began deteriorating when people began moving over from the NTT group after Tachikawa took the helm in 1998.
The new arrivals, whom holding company President Junichiro Miyazu said were brought over to ``strengthen the unity of the NTT group'' didn't fit in with DoCoMo's techie, freewheeling ways.
DoCoMo's independence within the NTT group peaked around 1998, partly because former President Koji Oboshi encouraged a venturesome spirit. Many employees at the time said DoCoMo should dump ``NTT'' from its name, and some went so far as to target NTT's fixed-line business as the enemy. Innovations such as i-mode emerged from that slightly irreverent, free-thinking atmosphere.
``Over 90 percent of the transfers don't understand the mobile communications business, and they haven't even learned about DoCoMo's products and services,'' one DoCoMo old-timer said. ``Since many of them are managers, unnecessary titles and departments have been created. Internal procedures have become complicated, and the upper echelon is full of former NTT officials. That makes it harder for original DoCoMo staff to climb the career ladder. Morale is deteriorating.''
Another said: ``Piles of papers and signatures are required for anything we do these days. Relying on precedent has become more important, so proposals for new businesses and services rarely get approved. Many executives who come from NTT consider DoCoMo a temporary assignment, so they want to play it safe and avoid making mistakes.''
Painting a picture of an out-of-touch management, a third moaned that ``employees involved with projects used to be able to attend meetings even when they didn't have any titles. Today, however, people without titles cannot attend important meetings, and workers on the front line have trouble getting their opinions heard.''
The three people quoted above worked at the cutting edge when DoCoMo began its cellular phone data communications operations, including i-mode.
The period in which bureaucratic ossification spread corresponds with that when company products and services began falling behind.
A simple managerial change led company to squander the lead it built up in GPS mobile technology, according to several DoCoMo personnel. DoCoMo and SnapTrack Inc., a U.S. wireless location services firm, jointly developed the technology used in KDDI's au GPS Keitai. By 1998, research had proceeded to the field-testing stage, and the overall concept was the same as the services that appeared in the au GPS Keitai. But when Tachikawa took over, the manager in charge of the GPS project was abruptly changed and the project fell by the wayside.
The new manager said he didn't understand its importance and simply dropped most of the former manager's plans, possibly because of a feud with his predecessor, several sources said.
Qualcomm Inc., the manufacturer of Foma rival cdmaOne chips, bought SnapTrack, and its technology has been incorporated in au's GPS Keitai. Wireless location services are now being positioned as one of au's main attractions.
DoCoMo's public relations department said confidentiality requirements prevented from commenting on claims that personal animosity was at the heart of the GPS debacle.
DoCoMo then is facing some significant hurdles. Employees say that some of its most creative people have lost motivation and left the company.
Outside the firm, a serious challenge comes from J-Phone in 2G services and from KDDI's 3G service, which features a wider service area and lighter and cheaper handsets than those for Foma.
But it is far too early to write the firm off. As well as finally introducing handsets that can compete with J-Phone on phonecam and Java applet capabilities, DoCoMo has begun seriously attacking the failings of its Foma service.
Longer-term performance, however, will rest on a resurrection of the company's entrepreneurial spirit.(IHT/Asahi: June 13,2002)
(06/13)
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