TOKYO- To preserve more resources for its new business objectives and recover a balance between a currently too-heavy workforce and a shrinking beeper business, NTT DoCoMo announced it is restructuring its Beeper Business Division. Some of the 400 employees currently working for the division will be moved to different jobs, and the number of beeper models-currently 27-will be largely reduced.
DoCoMo, the dominant mobile carrier in Japan, is accelerating its efforts to explore new beeper usage by fully utilizing its new calling party pays (CPP) service as well as launching plans to build DoCoMo beepers into consumer electronics devices and cars.
At the beginning of February, DoCoMo launched “02 DO,” its new CPP service. By 26 March, the carrier had already won 15,000 subscribers for the service, and about 90 percent of them are new beeper subscribers.
In DoCoMo’s 02 DO CPP program, beeper subscribers are not charged at all. Instead, callers to the subscribers pay U.S. 50 cents per call. DoCoMo is targeting corporate users for the service.
Tsuneo Kaneko, vice president of sales and planning for DoCoMo’s beeper division, said 02 DO creates new usage. For example, he explained, a supermarket business may distribute 02 DO terminals to its customers to inform them of the store’s special discount sales. Or perhaps a department store would distribute the 02 DO terminals to keep close relations with its “good” customers.
“Sales promotion using a beeper can be more efficient and less expensive than conventional sales promotion efforts such as using flyers,” Kaneko noted.
DoCoMo is providing a special program for corporate users who use 02 DO for distributing information to a mass audience. Its typical monthly charges are US$349 for up to 3,000 messages and US$681 for up to 6,000 messages. In addition, businesses pay a US$1,682 registration fee and have to purchase the terminals, which currently sell for between US$77 and US$115 each.
With this new service, DoCoMo plans to garner 400,000 customers during the first year (by the end of March 2000), and win 20 million customers by 2010.
But Kaneko said the company will be able to expand that target figure by providing completely new types of services, including preinstallation into consumer electronics devices and cars.
Once beepers are built-in, he said, customers could, for instance, remotely switch on a rice cooker or draw a hot bath. Customers could also open the door of a locked car if they are locked out, or locate their car if they forget where they’ve parked. Kaneko suggested DoCoMo launched its study for these new services in cooperation with some consumer electronics and car manufacturers.
In response to NTT DoCoMo’s actions, some New Common Carriers (NCCs) have introduced CPP service. But different from DoCoMo, NCCs are charging beeper users a monthly fee-though they are still cheaper than conventional programs. In addition, callers who had been exempted from paying a fee in a conventional service are charged U.S. 33 cents per call under the new service.
NCCs decided to introduce such a combined program rather than pure CPP to secure their monthly income.
Responding to such services, DoCoMo’s Kaneko said users do not see significant merit in these NCC services.
“For light users we are offering inexpensive courses with the monthly fee of less than 1,000 yen (US$8.30), and we don’t charge the callers anything.”
As the Japanese beeper market has been shrinking, NTT DoCoMo has been losing subscribers. DoCoMo Mobile Communications Network, the leading company of the DoCoMo Group, used to have 2.3 million beeper subscribers during its peak. However, that number has fallen to less than 1 million.
Due to such a decline in subscribers, its beeper business went into the red in fiscal 1997. The firm is expecting to report a bigger deficit in fiscal 1998, which ended 31 March. Annual results will be announced at the shareholders meeting in June.
Kaneko believes the number of subscribers will hit bottom in 1999 and rebound within a few years. But the firm does not have any idea how many users they will be able to keep in the future.
