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Docomo seeks to diversify into finance, retail

Japan's largest telco is holding talks on takeovers in financial services, retail and digital content industries to reduce its dependence on revenue from mobile phone calls.
Written by Ryan Huang, Contributor

NTT Docomo is looking at acquisitions in the finance, retail and digital content in an effort to diversify away from its dependence on revenue from mobile phone calls.

The Japanese telco's chief financial officer Kazuto Tsubouchi said the company had opened discussions with companies in these sectors, during an interview with Bloomberg.

Docomo is looking to nearly double its revenue from non-traditional businesses to 1 trillion yen (US$10.7 billion) by its financial year ending March 2016, noted the newswire. It is diversifying as the country's population shrinks and its saturated domestic market point to slower growth in its core wireless operations.

Docomo is looking to diversify into retail, finance and digital content. (credit: Docomo)

In January, the company announced plans to acquire online fashion retailer MAGAseek for up to over US$13 million.

"We’ll need a jump via mergers and acquisition deals to reach the 1 trillion yen target," Tsubouchi told Bloomberg. He explained the company could only grow up to 800 billion yen organically, he said.

The CFO pointed out takeover targets could benefit from accessing Docomo's customer base of about 60 million people or nearly half of Japan's population. The company would look to buy majority stakes in order to safeguard client data.

"That information can be useful to many businesses that face slowing growth," he said in the article.

Earlier this month, the telco created a 10 billion yen (US$109 million) venture fund to accelerate the development of new businesses for smartphones and tablets, as well as launch an incubation program for startups and venture companies.

In March, Docomo willintroduce smartphones with HEVC (High Efficiency Video Coding, also known as H.265) technology this year, which will help improve image quality and reduce the data strain on networks.



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