21 July, 2005
NTT DoCoMo, Inc.
DoCoMo’s 3G Strategy
1
2005�3������ US GAAP
Operating RevenueOperating Revenue
Operating IncomeOperating Income
Net Net IncomIncom
EBITDAEBITDA
EBITDA MarginEBITDA Margin
Free Cash FlowFree Cash FlowExcl. cash managementExcl. cash management
IncomIncom before income taxesbefore income taxes
2005/3�Full Year)US GAAP (1)
2005/32005/3��Full Year)Full Year)US GAAP (1)US GAAP (1)
4,844.64,844.64,844.6
784.2784.2784.2
747.6747.6747.6
1,625.71,625.71,625.7
33.633.633.6
1,288.21,288.21,288.2
2004/32004/3��Full YearFull Year��US GAAP (2)US GAAP (2)
5,048.15,048.1
1,102.91,102.9
650.0650.0
1,858.91,858.9
36.836.8
1,101.11,101.1
1,003.61,003.61,003.6 862.9862.9
ChangesChanges(2)(2)→→(1)(1)
--4.0%4.0%
--28.9%28.9%
15.0%15.0%
--12.5%12.5%
--3.2 points3.2 points
17.0%17.0%
16.3%16.3%
FY2004 Financial Results HighlightFY2004 Financial Results Highlight
�Billions of Yen�
2
Mobile Phone Market in JapanMobile Phone Market in JapanMobile Phone Market in Japan
56.156.1��22.522.5��
17.317.3��
*Source: Telecommunications Carriers Association (TCA)
Market ShareMarket ShareMarket Share
61,136
69,34975,944
81,921
36,21941,011 44,149 46,328
20013 20023 20033 20043 20053
Total subscribersDocomo subscribers
�x1000�
4.14.1��86,998
48,825
Penetration rate 68.1�
Cellular Phone Market in JapanCellular Phone Market in Japan
NTTNTTDoCoMoDoCoMo
auau
VodafoneVodafone
TUTU--KAKA
3
Changes in Subscribers to PDC and FOMA Services
1993/3 1994/3 1995/3 1996/3 1997/3 1998/3 1999/3 2000/3 2001/3 2002/3 2003/3 2004/3 2005/3E
(Thousand subscribers)
40,000
30,000
20,000
10,000
800M Digital800M Digital--System Service System Service
launchedlaunched
3G (3rd3G (3rd--Generation FOMA)Generation FOMA)2G2G--band Wband W--CDMA SystemCDMA System
2G (2nd2G (2nd--Generation mova)Generation mova)800M800M--band Personal Digital Cellular band Personal Digital Cellular
(PDC)(PDC)
1G Analog 1G Analog SystemSystem
Enrichment of Enhanced Handsets, Service Areas and Content
Enrichment of Enhanced Handsets, Service Enrichment of Enhanced Handsets, Service Areas and ContentAreas and Content
FOMA Subscribers Catching up mova in 2006FOMA Subscribers Catching up mova in 2006FOMA Subscribers Catching up mova in 2006
- Steady Migration to 3G Services- FOMA Service topped 14 million Subscriptions as of July, 2005-- Steady Migration to 3G ServicesSteady Migration to 3G Services-- FOMA Service topped 14 million Subscriptions as of July, 2005FOMA Service topped 14 million Subscriptions as of July, 2005
FOMA service FOMA service lanunchedlanunched
4
Cell Phone moving into 3rd HighCell Phone moving into 3rd High--Growth PhaseGrowth Phase
20 million
40 million
““Anytime, Anywhere, with AnyoneAnytime, Anywhere, with Anyone”” (Voice)(Voice)
From From ““VolumeVolume”” to to ““ValueValue”” (Internet Connection)(Internet Connection)
““Cell Phone for More Usability in Cell Phone for More Usability in EverydayEveryday--Life and BusinessLife and Business””Subscribers
* As of End May 2005
'96 '97 '98 '99 '00 '01 '02 '03'95 '04 �'94
Number of i-mode Service Subscribers
Number of Cell Phone Subscribers
Outright Purchase System
commenced (94/04)
i-mode Service launched (99/02)
49.3 million*44.5 million*
12.9 million*High-Definition Display
Camera (Mega-Pixel)
External Memory
Infrared Contactless IC
Barcode Reader
Communications Infrastructure
Communications Infrastructure IT InfrastructureIT Infrastructure
FOMA Service launched (01/10)
Daily-Life Infrastructure
Daily-Life Infrastructure
5
Key Drivers for 3G Success
Network
ServicesHandsets
9
6
60
22
91
404020023 20023 20033 20033 20043 20043 2005320053 2006320063��EstimateEstimate��
[Outdoor]Pop Coverage (%)
100100
8080
6060
4040
2020
00
5,0005,000
4,0004,000
3,0003,000
2,0002,000
1,0001,000
0040 70 150
99
3,800
99.9
Indoor Coverag
e(No. of
systems)
2,000
1,670
FOMA Coverage Expansion[Indoor]
No. of indoor systems
MetropolitanMetropolitanareaarea
service service launchlaunch
2001/102001/10
NationwideNationwideserviceservicelaunchlaunch2002/42002/4
Outdoor Pop.Coverage
2,300
2,800
10
7
Area Development through Selection of Optimum Base Stations matching Each Installation Environment
��� ��� ���
[Small-scale Small-volume Traffic] Coaxial System
Leased Circuit CoaxialBranching Unit
���
������
���
[Large-scale Large-volume Traffic] Optical Transmission System
��� ��� ���Host
StationAccess Station
Optical Cable
���
���
���
���
8 Branches or so
1 Sector 32 Access Stations (Typical Example)
Configuration of IMCS Base Station
Leased Circuit
Branching Unit
Branching Unit
Access StationAccess Station
���
���
Antenna
Underground Area
Leased Circuit
8
LargeMid-size BuildingsLargeMidLargeMid--size Buildingssize Buildings
Implementation of Micro Base Station, HighImplementation of Micro Base Station, High--Power MOF, LongPower MOF, Long--Haul MOFHaul MOF*MOF: Multi-drop Optical Feeder
Small BuildingsSmall BuildingsSmall Buildings
Standard Type
(High-Power MOF)
Standard TypeStandard Type
(High(High--Power MOF)Power MOF)
ConsolidatedLarge-scale Type(Enhanced MOF)
ConsolidatedConsolidatedLargeLarge--scale Typescale Type(Enhanced MOF)(Enhanced MOF)
SmallMid-size Type
(Micro Base Station)
SmallMidSmallMid--size Typesize Type
(Micro Base Station)(Micro Base Station)
ConsolidatedSmall-scale Type(Long-haul MOF)
ConsolidatedConsolidatedSmallSmall--scale Typescale Type(Long(Long--haul MOF)haul MOF)
FOMA BoosterFOMA BoosterFOMA Booster
HighHigh--PowerPowerMOFMOF
PDC FOMAPDC FOMA
Sharing of existing PDC optical cables and
reduction in number of antennas
Sharing of existing PDC Sharing of existing PDC optical cables and optical cables and
reduction in number of reduction in number of antennasantennas
Consolidated installation of BTS
Consolidated installation Consolidated installation of BTSof BTS
Miniaturization of Base Stations for saving spaceMiniaturization of Base Miniaturization of Base
Stations for saving spaceStations for saving spaceConsolidation of
Base StationsConsolidation ofConsolidation of
Base StationsBase StationsIndoor signals relayed to
Base StationsIndoor signals relayed to Indoor signals relayed to
Base StationsBase Stations
Extension UnitExtension Unit
FOMAFOMA(Micro(Micro--size)size)
MOF PDCMOF PDCFOMA FOMA
BoosterBooster
Enhancement of FOMA Service Area Quality
HighHigh--PowerPowerMOFMOF
LongLong--haulhaulMOFMOF
Outdoor Outdoor Base Base
StationStation
9
[Area Deployment only with 2GHz-BTS] [Area Deployment with 800MHz-BTS]
[PDC Area (800MHz)]
Area Complementation Area Complementation
No need for Dedicated Stations
2GHz-dedicated Station 2GHz-dedicated Station
PDCIMT-juxtaposition Station
2GHz BTS Area
PDC Area
800MHz BTS Area
Low-cost and PDC-quality Area Deployment planned with 800MHz Base Stations
Smaller Propagation Loss with 800MHz than 2GHz, resulting in Wider Areas
*Installable only in areas free of interference with operating frequencies at existing PDC stations
Rural Area Deployment through 800MHz System
10
2003/3 2004/3 2005/3
10.8%
40.1%
PHS
28.6%
8,540
10.5%
48.6%
23.9%
8,055
8.9%
6.6%8.8%
10.7%
(Unit: 100 million yen)
Common Infrastructure (telecom buildings, etc.)Quick-Cast (Paging system)PHSFOMAi-mode, etc.PDCTransmission Lines
Cell Phone Business
PHS 1.5%
6.9%
59.4%
19.4%
8,550
9.4%
4.2%
PHS 0.7%
Common Infrastructure (telecom buildings, etc.)
FOMA
i-mode, etc.
PDC
Transmission Lines
PHS 1.0%
(reference) Capital Expenditures for recent 3 years
11
- Started in Jun 2004, and number of subscriber hit 2.7 million as of Mar 2005- About 25% of FOMA i-mode subscribers using this money-saving service-- Started in Jun 2004, and number of subscriber hit 2.7 million aStarted in Jun 2004, and number of subscriber hit 2.7 million as of Mar 2005s of Mar 2005-- About 25% of FOMA iAbout 25% of FOMA i--mode subscribers using this moneymode subscribers using this money--saving servicesaving service
Subscribers to Pake-Houdai Service (Flat-rate Packet)
Pake-HoudaiMonthly Flat-rate Packet
Communications System for \3,900 to allow you to send as many packets as you like, covering the i-mode Service including of i-mode Mail
12
1,000
�
2,000
3,000
4,000
5,000
Changes in the Number of Packets (Number of packets/dayChanges in the Number of Packets (Number of packets/day--person)person)
Number of Packets per Day per Person –PDC [Monthly Average]
Number of Packets per Day per Person –FOMA [Monthly Average]
Num
ber o
f Pac
kets
use
d pe
r Day
(Pac
kets
Pers
on)
August99
Increasing Data Traffic
August00
August01
August02
August03
August04
February99
February00
February01
February02
February03
February04
13
Data
Tran
smiss
ion S
peed
[bps
]
1992 2000
10M
1M
100k
10k
2G
2M
W-CDMA
Approx. 14M
2-4M
Peak
3GaverageMAX spec.
1k1995 2005 …….
384k
2.4kPDC
9.6k
PDC
28.8k
PDCPacket
32k
PHS
64k
PHS
HSDPA
100M 4G
Ever-Increasing Communications Bit Rates (Data Transmission)
14
FOMA Packet Communication AreaFOMA Packet Communication Area384kbps maximum384kbps maximum
HSDPA AreaHSDPA Area14Mbps maximum14Mbps maximum
Image of Deployment for HSDPA Introduction
15
● Increasing Number of WORLD CALL Users [Destinations: Approx. 220 nationsregions]● Increasing Number of Roaming-out Service Users (WORLD WING, WORLD WALKER)
Roaming-in Service launched [Voice and AV: May 2005, Packet and SMS: June 2005]�900iG (FOMA/GSM) Service launched [December 2004]� Increasing Number of Roaming Partner Carriers
●● Increasing Number of WORLD CALL Users [Destinations: Approx. 220Increasing Number of WORLD CALL Users [Destinations: Approx. 220 nationsregionsnationsregions]]●● Increasing Number of RoamingIncreasing Number of Roaming--out Service Users (WORLD WING, WORLD WALKER)out Service Users (WORLD WING, WORLD WALKER)
RoamingRoaming--in Service launched [Voice and AV: May 2005, Packet and SMS: Junin Service launched [Voice and AV: May 2005, Packet and SMS: June 2005]e 2005]��900iG (FOMA/GSM) Service launched [December 2004]900iG (FOMA/GSM) Service launched [December 2004]�� Increasing Number of Roaming Partner CarriersIncreasing Number of Roaming Partner Carriers
EuropeEurope
AfricaAfricaMiddleMiddle--EastEast
AsiaAsia
OceaniaOceania
North AmericaNorth America
Latin AmericaLatin America
2003/12E 2004/3E 9E
Number of WORLD WING/WORLD WALKER Users
Number of NationsRegionsunder Roaming Service Coverage
100
50
60,000
30,000 WALKER
WING
2004/4-6(1Q) 2004/7-9(2Q)
122 nations regions122 nations regionsAs of Jun 2005As of Jun 2005
6E
Promotion of Global Businesses (1)
16
Sum total of subscribers to operators providing i-mode service worldwide topped 190 millionNations/regions i-mode service coverage (including Japan): 22 (including 12 scheduled nations/regions)-Conclusion of i-mode licensing deal with MTS in Russia (December 2004)-Conclusion of i-mode licensing deal with StarHub in Singapore (January 2005)
Functional enhancement and broader product lineup of overseas i-mode handsets-Provision of i-mode handset with “3Dstandby i-appli” capabilities (marketed in December 2004)-Participation of leading overseas handset vendors: Samsung (Sep 2004) , LG (Nov 2004), Motorola (Apr 2005) etc.
Sum total of subscribers to operators providing iSum total of subscribers to operators providing i--mode service worldwide topped 190 millionmode service worldwide topped 190 millionNations/regions Nations/regions ii--mode service coverage (including Japan): 22 (including 12 schedumode service coverage (including Japan): 22 (including 12 scheduled nations/regions)led nations/regions)-- Conclusion of iConclusion of i--mode licensing deal with MTS in Russia (December 2004)mode licensing deal with MTS in Russia (December 2004)-- Conclusion of iConclusion of i--mode licensing deal with StarHub in Singapore (January 2005)mode licensing deal with StarHub in Singapore (January 2005)
Functional enhancement and broader product lineup of overseas iFunctional enhancement and broader product lineup of overseas i--mode handsetsmode handsets-- Provision of iProvision of i--mode handset with mode handset with ““3Dstandby i3Dstandby i--appliappli”” capabilities (marketed in December 2004)capabilities (marketed in December 2004)-- Participation of leading overseas handset vendors: Samsung (Sep Participation of leading overseas handset vendors: Samsung (Sep 2004) , LG (Nov 2004), Motorola (Apr 2005) etc.2004) , LG (Nov 2004), Motorola (Apr 2005) etc.
Nations and Regions where i-mode Service is already Available (10 nations and regions)Nations and Regions where i-mode Service is Scheduled for Provision (12 nations and regions)
Changes in Number of Subscribersat Each i-mode Alliance Partner
Changes in Number of SubscribersChanges in Number of Subscribersat Each iat Each i--mode Alliance Partnermode Alliance Partner
200
150
100
50
Time of entering Time of entering PartnershipPartnership
KPN
KPN
-- M, B
ASEM
, BASE
DoC
oMo
DoC
oMo
FETFET
EE-- PlusPlus
Boogies
Boogies
TelephonicTelephonic
WIN
DW
IND
CO
SMO
TEC
OSM
OTE
TelstraTelstra
Cello
Cello
mom
mom
MTS
MTS
01/6 01/11 02/2 02/4 02/7 03/6 03/11 04/6 04/11 04/11 04/12 05/1
200
150
100
50
0
Number of Subscribers (million)
2
�
StarH
ubS
tarHub
Promotion of Global Businesses (2)
Number of Subscribers (million)
Documents for “Study Group to Examine Expanded Use of
Frequency Bands for Mobile Services
18
(10 thousand)
����
�,���
�,���
�,���
�,���
�,���
�,���
�,���
�,���
800MHz PDC System Service startedMarch 1993March 1993
1.5GHz PDC System Service startedApril 1994April 1994
2GHz IMT-2000 System (W-CDMA) Service startedOctober 2001October 2001
Packet Communications Service startedMarch 1997March 1997
i-mode Service startedFebruary 1999February 1999
PDC Half-Rate System Service startedDecember 1995December 1995
Frequency Width
Number of Subscribers
As of End September 2004
DoCoMo���
DoCoMo���
Other Carriers���
Other Carriers���
1994 1995 1996 1997 1998 1999 2000 2001 2002 20031993 End September
2004
Changes in Number of Mobile Phone SubscribersChanges in Number of Mobile Phone Subscribers
Percentage Frequency Width used by DoCoMo Percentage Frequency Width used by DoCoMo Percentage Number of SubscribersPercentage Number of Subscribers
DoCoMo 2nd Generation (Personal Digital Cellular: PDC)
DoCoMo 3rd Generation (W-CDMA)
DoCoMo 1st Generation (Analog)
Implementation StoryImplementation Story
Entire Mobile Phone Market
Changes and Current Status of Mobile Phone Subscription (1)
19
�
5000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000(Thousand)
20032002200120001999199819971996199519941993
20
40
60
80
100
0
(MHz)
Number of PDC SubscribersFrequency Width used for PDC
Changes and Current Status of Mobile Phone Subscription (2)
20
0
100
200
300
400
500(Thousand)
50
100
150
200
250
0
(MHz)Number of Subscribers per MHzAssigned Frequencies
France(GSM)
Germany(GSM)
Italy(GSM)
U.K.(GSM)
DoCoMo(PDC+FOMA)
40.39 million 64.80 million 36.40 million 52.99 million 45.36 millionNumber of Subscribers
Number of Subscribers per MHz – Comparison with European Nations
21
0
10
20
30
40
50
60
70
80
90
100���
20,000
15,000
10,000
5,000
01994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Estimated
Number of Base Stations (Outdoor) – FOMANumber of Base Stations (Outdoor) – PDC
Percentage Population Coverage – FOMAPercentage Population Coverage – PDC
Increase in Service Areas and Service Availability
22
Example of Tokyo 23 Wards (PDC)
<Small Zone Achievements>Average inter-BS distance of 15 Base Stations around JR Sinuous Station = 450mAverage inter-BS distance of 14 Base Stations around JR Sinuous Station = 350m
<Small Zone Achievements>Average inter-BS distance of 15 Base Stations around JR Sinuous Station = 450mAverage inter-BS distance of 14 Base Stations around JR Sinuous Station = 350m
Current Status of Implementing Smaller ZonesCurrent Status of Implementing Smaller ZonesCurrent Status of Implementing Smaller Zones
Smaller zones have been sought to the extreme for efficient use of spectrum those areas with heavy traffic in Tokyo 23 wards.Implementing such smaller zones entail very irregular BS arrangement, causing some greater probability of inter-BS interference to place massive workload on the frequency allocation design.Sinuous downtown areas have some very small zones with their BS area radius (cell area radius) being less than 100m. Smallerzones than this are thought impossible in terms of the radio system implementation because of incapability of handover while moving.
: One Base Station Area(Legend)
Promotion of Smaller Zones for Efficient Use of Spectrum
23
(Thousand)
100
0
200
300
400
500
600
700
1995 1996 1997 1998 1999 2000 2001 2002 2003
Number of Base Stations in Tokyo 23 Wards(Excluding in-building micro stations)
Number of Subscribers per MHz
200
0
400
600
800
1000
1200
1400(Number of Stations)
PDC Base Station and Spectrum Efficiency
24
1,200(Billion yen)
1,000
800
600
400
200
01996 1997 1998 1999 2000 2001 2002 2003 2004
Estimated199519941993
FOMAPDC
Smaller Zones
Elimination of Dead Zones in Subways and Buildings
Nationwide Deployment
Half-Rate System
Nationwide Coverage
Smaller Zones and Elimination of Dead Spots
Elimination of Dead Zones inSubways and Buildings
800MHz1.5GHz Dual Network
Major Equipment Deployment
Changes in Capital Expenditure
25
FDD System700MHz 800MHz 900MHz 1.5GHz 1.7GHz 2.0GHz 2.0GHz 2.5GHz
TDD System
FY2012 and Beyond
FY2011
FY20010
FY2009
FY2008
FY2007
FY2006
FY2005
FY2004
New FrequencyNew Frequency New FrequencyNew Frequency
New FrequencyNew Frequency New FrequencyNew Frequency
New FrequencyNew Frequency
Analog TV
Service Termination
Being Used by PDC and cdma2000
Being Used by PDC
Being Used by W-CDMA and
cdma2000- DoCoMo- KDDI
- DoCoMo- Tu-Ka- Vodafone
-DoCoMo-KDDI- Vodafone
Scheduled for Service
Commencement in FY2006
Usage under study in ITU
To be used in pair
Transition and Consolidation
New FrequenciesExisting Frequencies
Estimated Wider Use of Mobile Phone Spectrum
Scheduled for Service
Commencement in FY2006
26
800MHz Band Reallocation Overview (Image)800MHz Band Reallocation Overview (Image)
DoCoMo→
KDDI→
DoCoMo →KDDI→
KDDI↓
KDDI←
DoCoMo ←KDDI←DoCoMo↓ KDDI
↑DoCoMo↑
DoCoMo ←
Downlink UplinkPresent
����↑
DoCoMo↑
����↓
DoCoMo↓
DownlinkUplink
After Reallocation
↑ ↓ ↓↑
DownlinkUplinkUplink DownlinkJuly 2012 and Beyond
810
855
900905
958
715
768
815
845
830
860
890
875
700MHz-band 900MHz-band
New Allocation Policy
800MHz-band
MIC has determined its policy to allocate the IMT-2000 frequencies in the 800MHz band to existing carriers –DoCoMo and KDDI.MIC has determined its policy to allocate the IMTMIC has determined its policy to allocate the IMT--2000 frequencies in the 800MHz band to existing carriers 2000 frequencies in the 800MHz band to existing carriers ––DoCoMo and KDDI.DoCoMo and KDDI.
800MHz-band Frequency Reallocation
27
20
40
0
60
80
100
120
(Required Frequency Width: MHz)
Fiscal Year2004�H16� 2005�H17� 2006�H18� 2007�H19� 2008�H20� 2009�H21�
2GHz
1.7GHz
800MHz�
Wider Use of Frequencies
Prediction based on Telecommunications Technology Council Model
Required Frequency as predicted
Prospective of Frequencies Available for FOMA Capacity Increase