KT-NTT Venture Forum

Announced last May, the first KT-NTT Venture Forum took place yesterday in Palo Alto, CA.

What's in a name ? This is a forum, it features Venture issues, and is led by KT and NTT, the fixed counterparts to KTF and NTT DoCoMo, whose partnership has been already blooming for a while. The brand KT appears first in this new venture, but NTT is a much bigger player.

What's in a location ? Initially planned to host the premiere, Seoul will organize the next round this September. How "neutral" can the Sillicon Valley be ? Both NTT America, Inc. (nttamerica.com) and NTT DoCoMo USA, Inc. (docomo-usa.com) are based in NYC, while KT America's HQ are in L.A. (ktamerica.com). But Palo Alto is home to DoCoMo Communications Laboratories USA, Inc. (docomolabs-usa.com), and NTT serves customers in the US far beyond the national expat community (ie Verio).

What's in a program ? 12 start-ups showed up and off at the Four Seasons Hotel Silicon Valley. 76 avid investors (VCs, Qualcomm, Sony, Samsung, Cisco, Intel & co) attended speeches by CTOs CHOI Doo-wan and Noritaka UJI. Each operator came with staff from 15 BUs. This was obviously meant to go beyond name-card trading and to let the Sillicon Valley take notice : we may not be the new sheriff in town, but we are no small fish either. And we are willing to invest, to make new things happen.

A few days earlier, SK Telecom confirmed the sale of Helio to Virgin*. To go to Hollywood from Palo Alto, you do have to go South...

Both Korean heavyweights are intensifying the competition at home, where KT and KTF will unite and where SKT purchases his way into the home broadband market. The former PTT is becoming more customer oriented and considering bundles (broadband at home with Megapass, IPTV with MegaTV, VoIP with KT, broadband on the go with KT Wibro...).

On the mobile turf, there seems to be a cultural shift these days :

- KTF found its mojo and developped a taste for marketing entertainment**.
- SKT keeps the overall lead (50%+ market share), but seems to be losing some of its cool factor. It is lagging behind his rival in the WCDMA frenzy : 27.4% of the market have been converted at the end of June 2008 and despite a better month by SKT, KTF holds 51.1% of these 12.3M subs.

SHOW succeeded the old SKT way : massive advertising, devoted shops, an aura of fun and buzz. "T" did enjoy the same treatment but with a rather "Deutsche Telecom" flavor : somehow less fun and less buzz. Actually, this zero-affect-non-brand sounds too techno-oriented and not very sexy, while the Show brand is clearly a hit : just compare "show-time" with "T-time" and it jumps at your face.

The leader is putting all its weight on the new USIM-based solutions (that's "T" and "USIM", not a new brand) including contactless payments. The loyalty strategy lies at the core of mobility, in a tiny little fortress of technology, at the very moment the competitor is embracing a more pervasive kind of ambition.


* see "Helio lands on Virgin island" (20080509)
** ditto Voda : Vodafone Music Reporter is to rock and roll with MySpace

NTT - DoCoMo : remerge, split-up, disrupt ?

You don't want 65% of your group's profits wandering too far away. So NTT want DoCoMo back. But new entrant MNOs strongly disagree. While announcing the selection of Ericsson as eMobile Ltd's main 3G network provider, CEO Sachio Senmoto asked for an AT&T-like split-up of the whole shebang, including DoCoMo because of their 56% market share. NTT is already a patchwork of regional units, but who would dare touch m-Japan Inc's champ ?

eMobile's extreme request was mainly meant to prevent the reconstitution of NTTsama Bell. Even DoCoMo can be a struggling leader... but with the full back-up / backhaul of its mother company, no competitor could ever dream of annoying them.

I'd like to know what DoCoMo's top execs think about a remerger with NTT. The cultural gap with the fixed dragon has been widening for years, the group would be under even more scrutiny, and the "everything mobile / pervasive mobility" vision would badly suffer the contradiction... But shouldn't they somehow be asking themselves how much they need a truly convergent profile to remain at the top ?

Orange are logically adopting France Telecom's integrated vision and even at Vodafone, former Mannesmann - Arcor people keep pushing for a descent in the "fixed" arena (again, the other day, at the CeBIT, a Vodafone DSL revival). If I were DoCoMo, I would at least consider reviewing my 10 year old vision. And why not, seize the opportunity : escape the risk of NTT dragging down the company and demand a formal and final split-up. I want my liberty back, I want to deal with any fixed player I want or why not, build my own.



* More about eMobile : in "J:COM's quadruple play - within the fence" (20060210) and in "3Greenfield Japan" (20051113)