TOKYO-Softbank, Microsoft Corp. and Tokyo Electric Power Co. (TEPCO) announced in August they will establish a joint company to provide wireless access line services.
According to the announcement, the new joint company will provide the wireless service at a speed of 1 Megabyte per second (Mbps) for individual users and at more than 10 Mbps for corporate users at almost half the cost of NTT’s conventional service price.
Market watchers expect the new entrant to trigger competition in the access line market, which NTT virtually dominates.
Other nontelecommunications companies, including Sony and Mitsubishi Materials, are entering the telecommunications industry one after another. They are targeting fixed-line subscribers.
Softbank, Microsoft and TEPCO announced their new company will provide a low-price, flat-rate communications service suitable for Internet access.
The company will construct base stations and antennas for placement on TEPCO’s electric poles. These units will be connected via microwave with subscriber units at each user’s residence.
TEPCO has a 40,000-kilometer fiber-optic network around the Tokyo metropolitan area for controlling its electric supply. TEPCO will use the network connecting its electric poles to provide the wireless access service.
The companies were scheduled to establish the joint firm in mid-September in Tokyo and launch a field test in October. Commercial launch is scheduled for third-quarter 2000.
NTT, which has traditionally employed a meter-rate system, recently announced it would launch a flat-rate service for Integrated Services Digital Network users at $90 per month by the end of this year.
The joint firm is planning to introduce its services at around $45 per month.
Mitsubishi
Meanwhile, Mitsubishi Materials plans to launch its Internet access service using wireless mobile terminals in the United States in 2001, targeting corporate users. The firm is planning to launch a similar service later in Japan.
Mitsubishi Materials’ new terminal, Smart Wireless Internet for Field Teamwork Communication (SWIFTcomm), enables users to connect to the Internet, send and receive e-mail, and perform simple database searches.
The network consists of base stations that will be located in cities or suburbs, terminals, and routers. Rikuo Takano, general manager of the Mobile Business Strategy Division of Mitsubishi Materials, explained that by using routers rather than conventional switches, the company can reduce the system cost to almost one-100th of the cost of using switches.
By providing its key technologies to local firms, Mitsubishi plans to launch commercial service in the United States, where the Internet is more widely used. After the company firmly establishes its business in the United States, Mitsubishi will provide service in Japan through a subsidiary.
While cellular service providers are struggling to develop next-generation systems to transfer huge amounts of information, such as motion pictures, the Mitsubishi system is targeting simple data transmission, such as e-mail, to reduce operational costs.
Takano said Mitsubishi is targeting $405 million per year from this business. Mitsubishi is now negotiating with several operators and venders in the United States.
Sony
Sony in June obtained a Type I license in Japan for a wireless local loop business. The leading electronics manufacturer is scheduled to launch WLL services in Tokyo, Nagoya and Osaka by July 2000, targeting small offices, home offices and heavy individual users. It will expand its service nationally by the end of March 2001. Sony plans to invest a total of $90 million in the business for the first three years.
Sony has been renting subscriber lines from NTT for its Internet access services.
The license, enabling Sony to have its own network facilities, provides an important advantage for the company, which is putting an emphasis on new network businesses to fully use its resources in the game and film industries.
In cooperation with Toyota and Internet Initiative Japan, Sony established Crosswave Communications (CWC) in December 1998. CWC started providing large-capacity networks for data communications for Internet service providers and corporate users in April.
By using its own WLL network, as well as CWC’s dark fiber, Sony will be able to largely reduce its network costs.
A variety of new businesses have been entering the Internet-access market one after another, partly due to an explosive expansion in demand for data communications and partly due to the recent remarkable innovation in communications technology, such as wave division multiplexing, routers and high-speed wireless data transmission technology.
