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DoCoMo defies telecoms slump

But a lot rests on 3G and i-Mode taking off

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NTT DoCoMo, the Japanese telecoms company, has defied the tired telecoms market by announcing a 26 per cent jump in revenues to Y4,686 billion (£27.1 billion) this year compared to last. Net profit leaped 45 per cent to Y366 billion (£2.1 billion).

The focus obviously falls on the company's extremely successful i-Mode mobile service which has wiped the floor with the West's WAP effort to tie the Internet in with phones. i-Mode contributed just over seven per cent of the company's total revenue and this is set to grow in future years.

However, its president Keiji Tachikawa made a point of saying he expected the i-Mode service to reach saturation soon - he puts this at 80 per cent penetration (it's currently at around 60 per cent). In terms of people, we're talking is 30 million subscribers.

So while i-Mode and NTT DoCoMo have managed to ride over this year's telecoms slump thanks to having a good product that works, it is really 3G networks that the company needs to keep on earning. Although a huge question mark hangs over the next-generation technology, there are many folk going out of their way to get it working.

DoCoMo was hoping to be the first with a 3G network this month but has put it back to later in the year. BT tried and failed with Manx Telecom on the Isle of Man. Vodafone is still at the basic testing stage. Plus other competitors have decided to ignore WAP protocols and provide a Westernised version of i-Mode.

The company has taken stakes in various 3G licence holders in Europe and Asia as well as in AT&T Wireless in the States.

If DoCoMo can work faster and better than the market, particularly in Europe, this may just be the first of many years where it outshines its rivals. If it falls behind, it will not only miss a chance of 3G leadership but will also see its current customer base drift away. ®

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