US Mobile Data Services Market Luring Asian Wireless Firms
By Dianne See Morrison - Mon 10 Dec 2007 11:57 AM PST
Just as Nokia (NYSE: NOK) is gunning for the US market, so too are Asian wireless firms. The lure: the potential that these players see in the country’s mobile internet access and data services market. In a detailed feature article looking at Asian interest in the US mobile market, BusinessWeek reports that Asian carriers have a wealth of experience in mobile data services, and as growth in home markets dwindle as mobile data penetration rates rise, they are increasingly seeing the US market as a burgeoning opportunity. (In some Asian countries, some 90 percent of consumers have adopted a wireless data plan, compared to 54 percent in the US, according to research firm IDC.) Currently, Americans spend as much on data services—such as ringtones, text messages, video, and music—as consumers in Asia and Europe. But given the size of the US market, and the innovation that open networks may bring to the market, companies are betting that US spending “could surge ahead.”
Japan’s largest wireless company NTT DoCoMo, (NYSE: DCM) the undisputed pioneer in mobile data services, wants to bring its expertise to the US market, and has staffed its Manhattan office with 80 employees, despite currently serving only a few thousand customers--frequent travellers between the US and Japan--a year. Japanese carrier KDDI, meanwhile, is testing a wireless service in the Northeast with the aim of bringing Japanese applications to the US market. Korean carrier SK Telecom (NYSE: SKM) is continuing to back youth-targeted MVNO Helio with extra funding of up to $270 million, though the wireless provider has struggled to gain traction with consumers and is looking for more ways to break into the market. In November, SK Telecom along with Providence Equity Partners made an unsuccessful bid for Sprint (NYSE: S) Nextel. Chinese companies are also looking at the US mobile market. Most notably, the Chinese government recently paid $3 billion for a stake in private equity firm the Blackstone Group, which invests in wireless businesses, including Germany’s Deutsche Telekom, (NYSE: DT) owners of T-Mobile USA.
Can Asian wireless companies make an impact? They’ve been burnt before in the US market--most notably NTT DoCoMo lost $3.3 billion on a $9.8 billion investment when it recently sold its 16 percent stake in AT&T. The trick it seems, is to find a partner--but then everyone wants the same one: Google.
Posted in: Companies, Operators, DoCoMo, MVNO, Helio, SK Telecom, SprintNextel, T-Mobile, Countries, Asia, China, Japan, Korea, Entertainment
