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The Young and the Wireless

Telecom: In Japan, teens' infatuation with cell phones has turned NTT DoCoMo into a corporate star--and the country's most valuable company.


TOKYO — This country hasn't had much to cheer about lately, but there is a new source of inspiration: Its teenagers--weighted down with money and free of old ideas--have helped to build a new Japanese corporate mega-star.

Their fixation with cellular phones outstrips even handset-crazed Europeans, thanks to the most successful, elegant and idiot-proof system anywhere on the globe for getting onto the Internet from a cell phone.

Reaping the benefits is a company called NTT DoCoMo, which almost overnight has become Japan's most valuable company. Now it is taking aim at the rest of the world, where obstacles abound but it has a running start.

After a decade in which Japan fell behind on the Internet and endured its worst economic performance since World War II, DoCoMo has emerged as a new kind of Japanese company--one that encourages individualism, eschews protectionism and breaks many of the old rules of Japan Inc.

Spawned by the stodgy former government telephone monopoly, NTT Corp., in 1992, DoCoMo was created almost as an afterthought to see what cellular communications was all about. Early employees recall pitched battles with NTT traditionalists skeptical of the ethereal nature of wireless.

A phone-monopoly spinoff with an unproven technology seemed an unlikely candidate to point Japan in a new direction. But its success has been phenomenal. Every day it signs up 50,000 new customers. In the stock market, it's now worth $280 billion--50% more than its NTT parent.

DoCoMo (Japanese shorthand for "DO COmmunication over the MObile network") has captured 58% of Japan's booming cellular market, rewarded stockholders handsomely and pioneered Internet on the move with its so-called i-mode service.

It's become a media darling and its visionaries, celebrities.

And as is often the case with success stories, it was part accident.

DoCoMo's early i-mode business plans targeted corporate warriors, with many Web sites offering airplane reservations, directories, stock trading, scheduling and news.

Almost as an afterthought, it threw in a few games. And that helped launch DoCoMo's rocket ride from corporate afterthought to global wireless leader.

The company admits it didn't fully appreciate what an incredible resource it was sitting on.

"Very few countries have this many teenagers with this much money," says Mari Matsunaga, a key member of the i-mode development team. "They're the eye of a hurricane."

Less than two years later, 60% of the sites are entertainment-related and Japan's young people have stormed the Internet airwaves, downloading cutesy screen characters, e-mailing their friends, checking restaurant listings, exchanging photos and tracking sports teams.

The latest DoCoMo advance: images of Japan's 25 most-wanted criminals appear on your handset so you can look for them while hanging out in bars or other shady places.

On average, Japanese consumers buy new, increasingly lightweight, stylish, feature-packed handsets every 18 months, many of which they then adorn with stickers, special straps, gizmos, characters, dolls and luminescent antennae. There are even chip-embedded, glue-on fingernails that light up when your phone rings.

"I e-mail my boyfriend five times a day," says Asako Shikichi, an 18-year-old high school senior, showing off a gray flip-up model decorated with a string of beads and a tiny surfboard. "I like DoCoMo. This is my third one."

DoCoMo's winning formula has turned Tokyo into a cellular mecca, drawing media companies from around the world to gawk, prod and poke.

The company somewhat modestly attributes its success in part to luck. But it also credits its open-system approach--following some past disasters driven by insularity--and its emphasis on making things as simple as possible for the customer. Point-and-click menus replace cumbersome Web addresses. Hit a tiny camera icon and "Want to go to the movies?" is automatically added to your e-mail.

"We never mention the word Internet, browser, mobile multimedia--those are all techie words," says Takeshi Natsuno, a DoCoMo executive director. "We just say 'Look, you can transfer money, check a dictionary, do this, enjoy that.' "

Users pay as little as 99 cents a month to visit 650 official Web sites--DoCoMo gets a 9% cut--but also have access to 23,000 free sites. All charges are then tallied on a single monthly phone bill, another innovation.

DoCoMo also has broken new ground with its corporate culture. People join mid-career and leave for other ventures, virtually unheard of at most Japanese companies. And forceful personalities are welcome.

Keiichi Enoki, the project's managing director, was pulled from relative obscurity at a company office in Tochigi prefecture for his strong and unconventional views. A longtime NTT engineer, he had always taken a keen interest in marketing, his wife's shopping preferences and his kids' video game crazes. These proved invaluable in shaping i-mode.

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