Dialogue with the President

Looking Forward to 2020 and Beyond

DOCOMO holds dialogues with shareholders, investors and other stakeholders in order to reflect opinions in our management. Here, we welcome Ms. Chieko Matsuda as a representative of our stakeholders with extensive knowledge in management theory and practice to talk with President Yoshizawa about DOCOMO's approach to value creation and initiatives to drive sustainable growth.

Expanding and Deepening Co-Creation with Partners

Matsuda: First, can you tell us about the business environment surrounding DOCOMO's business?

Yoshizawa: Competition has become increasingly severe in DOCOMO's business environment. This is because mobile networks have become an essential infrastructure, not only for individuals but in industry terms as well. On top of this, further advancements in technology have heightened expectations of services that can offer never-seen-before value. Competition has intensified in accordance with this.

Amid this wave of digital transformation, it's important to co-create with partners in order to generate services that offer new value to society and outperform the competition. With this in mind, we formulated our Medium-Term Strategy 2020 "Declaration beyond." Accordingly, DOCOMO is aiming to create business that contributes to industry and helps resolve social issues. In the year since announcing the strategy, we have taken steps to launch new businesses, including a trial aimed at commercializing technology associated with 5G (5th generation mobile communications) and artificial intelligence (AI).

» Review of the First Year of "Declaration beyond"

Matsuda: It seems that DOCOMO stands at the forefront of the industry and is helping to pioneer a new age. What areas of strength are you looking to enhance and what are your priority challenges? Can you explain your strategy in this regard?

Yoshizawa: One of DOCOMO's core strengths is our stable telecommunications networks that can be used comfortably anytime, anywhere. We also plan to steadily refine the quality of our network for 5G, which we will start providing in 2020, in a manner similar to past efforts. Providing a network alone, however, does not make a service. In addition to our efforts to build the optimum networks, a priority challenge is to expand and deepen co-creation by providing different business platforms to partners in an open manner. As examples, we will supply platforms for personal authentication, payment and billing, and for awarding points. Our strategy is to create unique, strong business foundations and offer new value based on the concept "+d," in which we add DOCOMO assets to those of our partners.

In the past, we gave weight to the business to consumer (B2C) business model, which is to find ways to enhance convenience for individual customers. Going forward, however, we believe the need will grow in the business to business to X (B2B2X) business model, in which we can provide platforms for various industries through supporting service providers—the second "B" in B2B2X.

Shift from Mobile Subscribers to "Members"

Matsuda: With a company as big as DOCOMO, it's no doubt possible to provide platform-based service in any field. Which areas will you prioritize?

Yoshizawa: Basically, we have every industry in our sights. We just have to focus on the priorities of each partner and the themes that enable us to resolve social issues.

To give an example, priorities in the automobile industry may revolve around automated driving and cars that can connect to a network as means to resolve the social issue of a declining birthrate and an aging society. I believe DOCOMO has the ability to provide assistance in a number of other areas as well, such as with university hospitals giving remote diagnostics advice in support of local physicians.

Matsuda: Can you tell us about an initiative DOCOMO is undertaking for your customers?

Yoshizawa: We hope to forge deeper connections with individual customers by delivering "benefits, convenience and amazement" that go a step beyond. In concrete terms, we will continue proposing plans that offer enhanced benefits and give back through "d POINTs." By adding more participating stores where "d POINTs" can be earned and used in various retail stores such as pharmacies and convenience stores, we are expanding customer benefits, while at the same time this leads to more customer referrals as well as commercial transactions for our partners. We have also started a service that offers investment experience using "d POINTs." Going forward, we will look to expand the scope of use of "d POINTs."

Matsuda: Rather than changing points for cash, DOCOMO will provide benefits in place of currency. That sounds just like a "DOCOMO virtual currency," which is a real possibility in today's digital world.

Yoshizawa: DOCOMO has re-defined the meaning of "customers" as we expand services outside of the telecommunications field. DOCOMO has spent years trying to increase the number of mobile subscribers, but Japan's population is limited and the penetration rate of mobile phones has already exceeded 100%. As such, we will shift from a customer base centered on mobile subscription to a customer base centered on members.

Our "members" refer to customers who use DOCOMO services regardless of the presence or absence of mobile phone subscriptions. Such customers include people who use "d POINTs," a DOCOMO credit card like "d CARD" or AI agent service "my daiz" while subscribing to a different mobile carrier. In addition, by using the personal data from these services held by DOCOMO, we can send customized information to individuals as well as information on recommended products and services.

Matsuda: One-to-one marketing has become increasingly popular in recent times, and with DOCOMO taking this on board, it feels like big changes are happening.

Toward an Open Company Through Communication

Matsuda: I think cohesive group management and soundly functioning governance will become important as business grows.

Yoshizawa: In order for DOCOMO employees to take a positive approach in business and have the desire to tackle new challenges, we implement "proactive governance," in which we formulate business plans based on key performance indicators (KPIs) and key goal indicators (KGIs), and execute them via a plan-do-check-act (PDCA) cycle that helps us monitor progress.

In terms of defensive governance, we are very thorough in our information management from both individual and system perspectives since we handle a high volume of personal information in our operations.

With regard to compliance, I am focusing on communication between employees. I always tell people to be on equal terms, whether they are in a managerial position or not. That means having a sense of humility, seeing eye to eye and listening carefully to each other's opinions. Inconsistency in communication can cause compliance to break down, which in turn may lead to misconduct.

Matsuda: I agree. In typical Japanese pyramid-type organizations of the past, communication from the top down was common whereas treating others as equal was not. As workstyles have changed, employees have come to be seen as stakeholders. This has in turn altered the way people perceive governance and compliance at Japanese companies.

With regard to communication, you actively attend meetings with investors and visit docomo Shops throughout Japan, right?

Yoshizawa: I often have discussions with investors through investor relations (IR) roadshows overseas, which are held twice a year in North America and Europe; IR activities in Japan; investor meetings following financial results for both interim and full year periods; and individual meetings. I also visit docomo Shops around Japan every month and speak with managers and staff to inquire about the views of customers. In the two years since being appointed president, I have been to over 100 shops.

I try to reflect on what I have obtained through such communication in management to make DOCOMO a more open company. Also, new ideas are born when diverse human resources pursue joint growth and mutual improvement rather than being bound by one's ideas and staying inside one's comfort zone. In other words, innovation requires openness.

Matsuda: Human resources with similar values and backgrounds working earnestly in a closed organization does not lead to enhanced productivity anymore. Maximizing the potential of the individual and encouraging collaboration both within and outside the company will help create true value, just as DOCOMO is doing.

Looking forward to 2020 and beyond, I have high expectations that DOCOMO will be a leader for change in the world and achieve sustainable growth by creating unique value.