TOKYO-NTT DoCoMo, the largest mobile carrier in Japan, is accelerating preparations for the launch of its commercial-based 3G service Oct. 1.
NTT DoCoMo initiated an experimental 3G service last 30 May on a limited basis only to 4,500 select users. Although some users have experienced a few problems with the service, the trial seems to be running fairly smoothly.
Many more users are expected to use the 3G services on the October launch date, yet questions still remain. Can the system facilitate advanced services for the mass users acceptably? Can DoCoMo provide enough mobile handsets? Will the service provide enough high-quality content? Although the operator said it is targeting corporate users, will many corporations use their services?
At a recent press conference, Keiji Tachikawa, president of NTT DoCoMo, declared, “All necessary preparations have progressed steadily. We will launch commercial service October 1.” The industry, however, responded to him with skepticism.
For the experimental 3G services, selected users were given one of three 3G terminals: a basic terminal provided by NEC, or a visual phone or PC card type handset provided by Matsushita.
DoCoMo admitted that it received some complaints from users such as, “the line tends to cut off during conversation” or “the iMode site tends to freeze while browsing.” In an effort to fix these problems, the carrier replaced the basic NEC handset with an improved device mid-July.
The networks are still unstable. According to DoCoMo, 328 problems were found on their networks since 30 May, and 235 problems have already fixed. “We are making every effort to solve the rest of the 93 problems,” said Shiro Tsuda, managing director of DoCoMo networks.
According to Tsuda, the operator has been conducting a load test (applying more stress to the system) once a week in order to identity potential problems.
At the end of July, NTT DoCoMo released the results of a survey that the carrier conducted with the 4,500 experimental users. According to the survey, most of the users are satisfied with their 3G services.
However nearly half of those surveyed complained about poor connectivity. According to Tachikawa, the current 3G handset achieves a 90-percent connection rate, which is 8-percent lower than that of DoCoMo’s 2G handset.
Some experimental users complained about high packet communications fees. During the experimental service period, the operator is charging 0.05 yen (US$0.0004) per packet. If a user downloads a music file with 3 Mbps (using packet communications), it costs 1,200 yen (US$10). DoCoMo said the carrier has not decided packet communications fees. But Tachikawa said that the carrier is going to introduce a couple of different charging schemes for packet communications to lighten the fee for heavy packet users.
Other trial users also complained of poor content. During the experimental period, DoCoMo is providing only limited content. Tachikawa said that DoCoMo will encourage the content providers to develop a larger variety of content designed for 384 kbps data transmission, while DoCoMo itself will gear up preparation to launch new visual services. DoCoMo is going to launch M-stage music service and i-Motion in October at the earliest.
Another obstacle for the carrier is 3G handset supply. DoCoMo selected 11 handset vendors for 3G service. However for the experimental service, only two manufacturers-NEC and Matsushita-provided handsets. Nine other vendors are currently gearing up their efforts to develop 3G handsets by the deadline. Kanji Ohnishi, deputy general manager of Sony Corp., a 3G handset vendor, said that Sony is going to offer a 3G terminal for music distribution service by the time DoCoMo launches its M-Stage music service.
Commercial services that will be offered with the 3G service include an image clipping service called “i-Motion,” a music distribution service called “M-stage music,” and a dual-network service that allows customers to use a single telephone number for both a 3G handset and a 2G handset.
NTT DoCoMo is planning to expand the service area rapidly. It will launch the 3G service in Nagoya and Osaka by the end of this year; launch all major cities around the country by 2002; and achieve 97 percent population coverage by March 2004.
In Japan, mobile users (including Personal Handyphone System users) totaled 69.9 million as of the end of July and penetration rates reached 58 percent. NTT DoCoMo is expecting that the number of new subscribers in FY2001 will go down by 20 percent a year and ARPU (average revenue per user) will go down from 8,650 yen (US$72) in FY2000 to 8,580 yen (US$71) in FY2001.
Since the 3G service is targeting business users rather than individual users, the operator is anticipating the ARPU to be higher with 3G service users than with its 2G services. NTT DoCoMo is planning to get merely 150,000 3G users for the first year (by March 2002). But it is expecting the 3G users will expand rapidly.
