An Open Platform Strategy for NTT DoCoMo

An Open Platform Strategy 15.914 Winning in Tech Markets Garrett Dodge May 12 2008

Agenda ,[object Object],[object Object],[object Object],[object Object],[object Object]

Project Overview ,[object Object],[object Object],Business has been Flat Losing Market Share

Japan Mobile Market Overview Commoditized market Market Revenue Anticipated Market Size Growth Opportunity (B¥/year) Data Voice Data Voice Market ARPU (Average Revenue per User) (¥/year) (year) (year) (Source : Nomura Institute) 2006 2011 (anticipated) * M-contents : Entertainment (Ring tone, game, etc) + Info (news, weather, etc) 2006 2011 CAGR Mobile Telecomm. 70,000 72,000 0.6% M-Solution 6,460 17,000 21.4% M-Commerce 4,600 12,300 21.7% M-Contents 3,324 3,873 3.1% M-Ad 406 1,440 28.8% M-Payment 154 385 20.1% Sum 84,944 106,998 4.7% Mobile Telecomm M-Solution M-Commerce M-Contents M-Ad M-Payment

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Current Market Dynamics Analysis I

Types of “Openness” Contents Platform Network Infra Handset Layers Abilty for third party contents provider to offer services on carriers’ network Abilty for third parties to access to carriers’ netwrok infra Abilty for users to use handsets not tied to carries Openess Definition ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],DoCoMo Status Skype in AT&T network MVNO – Virgin Mobile iPhone in T-Mobile Network Example Focus of Our Proposal Enabler

New Dynamics W/ Open Platform Strategy

Unique Complimentary Assets ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Platform Examples ,[object Object],[object Object],Facebook Salesforce.com PC & IBM Pricing Governance Value Creation Value Capture ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Enhancing Open Platform Contents Providers Customers Contents Management/ Search Contents Platform Network Infra Handset ,[object Object],[object Object],[object Object],Contents Personaliztion Application API Native Apps UI Ad/ M- Marketing QoS Security Privacy ,[object Object],[object Object],[object Object],Payment Official Unofficial

Integrated Services Contents Providers Customers Contents Management/ Search Contents Platform Network Infra Clients ,[object Object],[object Object],[object Object],Contents Personaliztion Application API Native Apps Ad/ M- Marketing Payment SNS Maps Rich Phonebook Personalized Menu Daizo Ikeda In Aoyama: Map Listning: Chemistry I like this game! Photo: Karaoke party Friend locater Top News Menu Search Friends Personalize Ad Information Advertiser Today’s offer New Restaurant Payment

How to capture value? ,[object Object],NTT DoCoMo’s Open platform End users Contents/ Appl. 3 rd party developers JV (Broker) M-Portal (search) Portal M-advertisement, search 3 ,[object Object],1 ,[object Object],[object Object],2 M-payment Other vendors

Revenue Model Type Type ,[object Object],CP Revenue Share Transaction Fee For every purchase, charge a fixed processing fee Revenue Sharing Charge a percentage of sales CP connection fee Listing Fee Fee per time period per product listed on the platform Content Charging Make money on ad for content provider; After reaching critical mass, charge a fixed fee after that. Setup Cost Charge a one-time fee for the right to sell on the platform Store Front Allow merchants to pay and setup a virtual storefront M-Advertisement Sponsor Fee Allow merchants to bid for a spot on feature product list

Revenue Model (Developers) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Quality of Service Critical Factors Recommendation Quality Applications ,[object Object],[object Object],[object Object],Customer safety ,[object Object],[object Object],[object Object],Security ,[object Object],[object Object]

Open Platform Timeline ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Recommendations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Questions "Every time a closed system opens, it begins to interact more directly with other existing systems, and therefore acquires all the value of those systems." Kevin Kelly, ‘ New Rules for the New Economy ’

Appendix 15.914 Winning in Tech Markets Garrett Dodge

Japan Mobile Market Overview 1 Big + 1 Middle + 1 Small Competitive Structure (Source: NTT Docomo website) Market Share (Acc. Subscriber) Market Share (Net Addition) Competition Since MNP (2006.10)

NTT DoCoMo’s Current Strategy Telecomm Infrastructure Overcome Commoditization Migration to 3G : 80% of total subs. Flat-rate / Life-Assistant / Int’l Services Mid-term Strategy : 3 Directions Total ARPU ↓ (even data ARPU ↑) Personal Ubiquitous & Seamless Flat-rate ,[object Object],[object Object],[object Object],[object Object],Life-Assistant ,[object Object],[object Object],[object Object],[object Object],Int’l Services ,[object Object],[object Object],Infrastructure Telecomm  Lifestyle Step-up

An Open Platform Strategy for NTT DoCoMo

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