Reuters Summit - NTT DoCoMo explores offering video content

TOKYO (Reuters) - NTT DoCoMo Inc, Japan's leading mobile carrier, is exploring the possibility of offering video content as it looks for new revenue to run over its data network, a company executive said on Tuesday.

The company has pushed its phone-based internet service in the last five years and was also experimenting with other web-related services, but has been muted on the video content arena that some industry players see as a potential growth area.

NTT DoCoMo has no immediate plans to go into actual creation of broadcasting content, but rather would use its network as a conduit to provide such programmes to its users, said Kiyoyuki Tsujimura, the company's executive vice president of products and services.

"The relationships we create with broadcasting companies should be linked to what kind of business model we want to come up with," he said at the Reuters Asia Technology and Telecoms summit in Tokyo.

"The mainstay of our business for the time will be the traffic" over our network, he said at the summit, held at Reuters offices in Tokyo. "For the time being we should concentrate on communication.

He added that any programming content to be delivered over mobile phones would likely be more limited in length, since the half-hour or hour-long TV broadcasts could be hard on the eyes of people watching them on a small screen.

DoCoMo, the mobile unit of Nippon Telegraph and Telephone Corp, won a record number of new customers in the second quarter, helped by a broad line-up of phones and the continued popularity of family discount and flat-rate data plans, both of which it started last year.

The company ended August with 49.8 million subscribers, giving it about 56 percent of the total Japanese market.

DoCoMo is struggling to boost profits amid intense competition and a price war in voice and data services. With more than 70 percent of Japanese already owning mobile phones, it has become increasingly difficult for operators to attract new users.

DoCoMo, which accounts for more than 70 percent of NTT's consolidated results, has said it plans to look for new sources of revenue to help offset declining trends in mobile communications. It is also experimenting with a system that allows people to pay electronically for items at stores using money stored on their phones.

Tsujimura said the company planned to make the so-called wallet phone service a standard for its flagship line of phones. He also said the feature would be on some models of its more affordable line of third-generation phones.

Separately, NTT, which is also trying to push more users onto data services by upgrading its networks to fibre optic, is well on the way to its goal of signing up 1.8 million new subscribers for the service in the year to next March, said Ryuji Yamada, NTT senior executive vice president.

"We want to achieve that number," he said. "If we fail, we will be very close. There are cases where services are not available. Some people wait for two to three months.

The world's largest telecoms group by revenue is competing with rivals such as KDDI Corp and Softbank Corp for shrinking voice traffic in its fixed-line business as Japanese users switch to mobile and internet calling.

But the company is gaining ground in fibre-optic services, as it increased users by 19.6 percent in the first quarter to nearly 2 million.

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