Roughly ¥1.9 trillion into foreign carriers to export i-mode and W-CDMA (2000)

What an attempt to buy a standard left behind

The heart of this decision can be read as an attempt to buy a standard with the cash of a company winning at home without contest. Stakes of 15–20% that stopped short of control were, as a way of pushing the adoption of W-CDMA and i-mode, coherent enough in principle. But the execution coincided with the very peak of the telecom bubble, which meant underwriting shares at inflated market prices in trillion-yen blocks — bad luck in timing that cannot be separated from the outcome. And because the core business was performing so well that it could absorb the losses, the question of investment discipline was never put to management sharply by shareholders.

The failure, it should be said, was not DoCoMo’s alone. European carriers were spending vast sums on third-generation licences and acquisitions at the same time, and most of them ended up writing the money down. What made DoCoMo unusual was less the size of the loss than the fact that, holding only minority stakes, it could not involve itself in how the investees were run and withdrew without even having gained the experience. How should a company going abroad design the relationship between control and shareholding? The question left behind by roughly ¥1.9 trillion of investment runs on into the cross-border M&A of Japanese companies since.