Case Study on

NTT DOCOMO JOINT VENTURE WITH

TATA TELE SERVICE LIMITED

Presented by

Name ID

Md Jahedul Islam 0921432

Anjuman Ara 1020693

Shomi Ghosh 1127013

Mr. Tamzid Rabby 1130419

Introduction:

 Company Overview

NTT DCCOMO

 NTT DOCOMO is subsidiary of Nippon Telegraph and Telephone

corporation
 NTT DOCOMO is Iconic brand in Japan
 Established in july 1992
 Name of the CEO: Karou Katto
 Capital: 949.68 billion yen
 Employees: 23,289
 lunched I-mode in February 1999
 Lunched 3G service in October 2001

TTSL (Tata Tele Service Limited)

 TTSL is subsidiary of TATA group

 Established in 1996
 It’s headquarter in Mumbai ,Maharashtra, India
 Name of chairman : Kishor Anant Chakar
 Products: Fixed line and mobile telephony, broadband services, digital
television and network services
 About Case

NTT DOCOMO Joint Venture with Tata Tele Service

Limited:

Tata DoCoMo Limited

Type : Joint Venture

Industry: Telecommunication
Established: November 2008
Headquarters : New Delhi, India
Area served : India
Services : Mobile network, fixed wireless telephony, USB internet dongle
Equity : TTSL 74% and NTT DOCOMO 26% ( after joint venture)

Problems

• NTT DoCoMo’s revenue declined because of introducing discount

program in current market.

• NTT DoCoMo could not enter the Indian market without joint venture.

• As NTT DoCoMo was holding the minority company share, so low

involvement occurred in managing the joint venture

• DoCoMo wants to get more involvement in management decisions.

External Environment Analysis:

 Pest Analysis

Political:

• Foreign company is not eligible to apply for a license in its own name.
• No foreign individual investment is allowed unless go for joint venture.
• A foreign company cannot acquire more than 74% company share.
• In Joint Venture Company, a majority of Directors and Board members including
Chairman, and CEO must be Indian residence

Economical:

• TATA is getting capital from a foreign investor.

• Capturing new market introducing 3G network.
• Rising up the GDP of the country

Social:

• Reducing unemployment.
• Lifestyle of Indian people changed.
• Communication has become easier.

Technological:

• Faster internet access.

• Video calling.
• Faster downloading.
• Chatting.
Porter five Forces model

Rivalry among Companies:

 Telecom sector is highly competitive and generally earns low returns

because the cost of competition is quite high.
 A highly competitive market results from:
i) Many players of about the same size; there is no dominant firm
ii) Little differentiation between competitor’s products and services
iii) A mature industry with very little growth; companies can only
grow by stealing customers away from competitors
There are majorly 3 types of players in the telecom industry:-
i) State owned players. (BSNL and MTNL)
ii) Private Indian players. (Reliance comm, Tata comm, Bharti Airtel)
iii) Foreign invested companies. (Vodafone, Idea cellular)
 Competition has intensified with the entry of new cellular players in circles
leading to reduced tariffs which have hurt major operators, as they will be
unable to recover their high capital investment costs.
 BSNL is dedicated to performing its work as it drives India into the next
league of telecom supremacy by providing technologically advanced
services at an affordable cost.
 On the private side, there has been a tough competition between Bharti
Airtel and Vodafone each having a market share of 30 % and 24%
respectively.
 Idea cellular, Reliance comm. and Aircel are also in the race but they
lack in the infrastructure when compared with Vodafone and Bharti Airtel.

Bargaining Power of Suppliers:

 Fast changing technology such as 3G so bargaining power of suppliers is

medium.
 If the company doesn’t own tower infrastructure, then bargaining power
of provider is high.
 Medium cost of switching since changing the hardware would lead to
additional cost in modifying the architecture
 Limited pool of skilled managers and engineers especially those well
versed in the latest technologies
 IT Vendors’ bargaining power is high as the telecom technical support
and innovation is highly dependent on such suppliers.
 A lot of technical assistance provided by NTT DoCoMo.

Bargaining Power of Suppliers:

 Fast changing technology such as 3G so bargaining power of suppliers is

medium.
 If the company doesn’t own tower infrastructure, then bargaining power
of provider is high.
 Medium cost of switching since changing the hardware would lead to
additional cost in modifying the architecture
 Limited pool of skilled managers and engineers especially those well
versed in the latest technologies
 IT Vendors’ bargaining power is high as the telecom technical support
and innovation is highly dependent on such suppliers.
 A lot of technical assistance provided by NTT DoCoMo.

Threat of New Entrants:

 Continuous entrance will make monopolistic -> perfect competition

 Factors that limit entrance :
 High loyalty of existing customers.
 High fixed costs and difficult access to finance.
 Scarcity of resources.
 Already existing very low tariff rates.
 Government restrictions or legislation.
 New technology provides entry for foreign entrant.
 M&A in telecom sector are giving to new entrants. Bharti –zain, uninor-
unitech and telner, Aircel- maxis and reddy
 FDI has made it third largest sector.

Threat of Substitutes:

 Non-Traditional Alternatives:
 Online Chat
 Satellite Phones
 Wireless land phones
 All of them have a huge potential in the future
 Between CDMA & GSM
 Issue of mobility & penetration with the substitutes.
 Cable TV and satellite operators now compete for buyers and internet
telephony, delivered by ISPs and not telecom operators.
  Price – performance trade off is very high.
 Overall threat of substitutes is between Low to Moderate level.

Strategic Group Maps

120
100
80
60
40 market share%
20
0
no of subscriber
in million
Functional Structure

• Top Management
• Manufacturing
• Sales
• Finance
• Personnel
 IFAS Matrix for NTT DoCoMo

Key Internal Weight Rating Weighted Comments

Factors Score

Strength 0.20 5 1 Make more

Pioneer of 3g satisfaction to the
network subscriber

Strong 0.25 5 1.25 Introduced exclusive

technology &unique technology
on telecommunication

Distribution 0.15 3 0.45 Maintaining subscriber

network relationship and
service
Strong R&D 0.8 4 0.32 Gives the best no. of
department subscriber

Well known 0.12 3 0.36 Makes more reliable to

brand in the subscriber
Japan
Weakness 0.05 2 0.1 Reducing total
Low market revenue
share
Not allowed 0.15 5 0.75 Reducing chance to
for individual gain properly like in
investment Japan.
 EFAS Matrix for NTT DoCoMo

Strategic Weight Rating Weighted Comments

Factors Score

Opportunities 0.15 3 0.45 Already

Common customer
Industry are willing
Practice
to use.
Using new 0.11 3 0.33 Providing
technology network
and gaining makes higher
capital capital
India is a 0.05 5 0.25 For higher
growing users
market company
can get
higher
revenue
Threats 0.18 5 0.9 Makes profit
Customer minimization
Loyalty
Government 0.25 5 1.25 Affects
policy company
growth
Other 0.26 2 0.52 Already
Competitors Capture
customer
satisfaction
Recommendation

 By reducing call rate they can retain their current customer.

 NTT DoCoMo should introduce their 3G services to new customer segment

at a reduced rate to attract the other consumers.

 NTT DoCoMo can offer more money to develop the total infrastructure of
the joint venture and thus it can be able to acquire more company
share.

 NTT DoCoMo should do more advertisement of their strong 3G service

and after grabbing a large consumer market DoCoMo can think to revise
the joint venture terms to get more involvement in management
decisions.