Tokyo: Japan’s largest mobile carrier, NTT DoCoMo , wants to invest in a Vietnamese content provider, a senior company executive in charge of global business said in an interview on Thursday.
Masatoshi Suzuki also said that India’s Tata Teleservices, in which DoCoMo holds a 26% stake, would likely struggle for some time to make a profit, though he expected the number of subscriptions to rise by more than 20 million in 2011 from nearly 90 million at the end of March.
Faced with limited growth in the domestic market due to Japan’s ageing population, NTT DoCoMo, which competes with KDDI and Softbank at home, is seeking investment opportunities in other parts of Asia.
However, government regulation and market saturation are clouding its prospects, Suzuki said.
Asked what kind of acquisitions Docomo was considering in Vietnam, he said: “Rather than a carrier, a company that can provide content and applications.”
Suzuki declined to give any more details on which Vietnamese company NTT DoCoMo was considering, saying the deal had yet to be announced.
In India, NTT DoCoMo in 2011 invested an additional Rs800 crore ($178 million) in Tata Teleservices, which is majority owned by the Tata Group conglomerate, to be used for its 3G rollout.
Analysts expect the upgrade to 3G to boost average revenue per user, but warn premium services may take time to pick up in a price sensitive market such as India.
“India’s carriers always take 5 to 7 years to become profitable,” Suzuki said. “So the scale increases, but the ARPU (average revenue per user) is not high. Switching to 3G will not bring a profit right away, so you have to take a long term view.”