TOKYO-The third-generation (3G) business plans and service strategies of three Japanese cellular carriers are becoming more concrete. NTT DoCoMo and J-Phone Group, the mobile business of Japan Telecom, are going to launch 3G services based on wideband-CDMA (W-CDMA) technology in 2001, and the country’s other cellular carrier, KDDI, plans to begin 3G services based on cdma2000 in 2002.
At CEATEC 2000, Japan’s largest conference and exhibition for communications equipment and devices, all three carriers demonstrated their conceptual 3G terminals and planned services, which carriers said will bring futuristic, rich and true multimedia services to users.
NTT DoCoMo is scheduled to launch its 3G services in the Tokyo metropolitan area in May 2001, earlier than any other carrier in the world. Japan’s leading carrier plans to expand its service areas to Osaka and Nagoya in December 2001, with nationwide service in April 2002. By the end of May 2004, the carrier aims to achieve population coverage of 97 percent.
NTT DoCoMo in April 1999 ordered base transceiver stations (BTSs) from five vendors, remote network controllers (RNCs) from three vendors and 3G terminals from 10 manufacturers. All the infrastructure providers are applying the final touches to their 3G equipment, and the terminal vendors are making efforts to finalize the concepts for their 3G devices.
J-Phone initially announced it would launch its 3G services in Tokyo, Osaka and Nagoya in December 2001. But Haruo Murakami, president of Japan Telecom, recently said the carrier would like to launch services as early as possible. The carrier plans to expand services nationwide by October 2002 and increase the population coverage to 90 percent by December 2003.
To allow its 3G business to launch smoothly and efficiently, Japan Telecom established J-Phone Communications, a holding company, and reorganized nine regional cellular operators into three groups-J-Phone East, J-Phone West and J-Phone Central. Japan Telecom now holds 54 percent of J-Phone Communications, Vodafone Group holds 26 percent and British Telecommunications holds the remaining 20 percent.
J-Phone selected Ericsson, Nokia and NEC as its 3G infrastructure vendors. The carrier has not released the names of its 3G terminal manufacturers. J-Phone is requiring the three network vendors to produce international-standard equipment to reduce procurement costs. DoCoMo requires its vendors to produce equipment to international specifications, along with its own standard definitions, which it says ensures high-quality services.
Neither NTT DoCoMo nor J-Phone has disclosed their 3G services menu. However, the carriers are expected to provide:
Asymmetric high-speed services-384 kilobits per second (kbps) for uploading and 64 kbps for downloading high-speed packet data communications.
Symmetric high-speed services-384 kbps for uploading and downloading packet-data services.
Symmetric low-speed services-64 kbps for uploading and downloading low-speed packet communications.
64 kbps circuit-switched services
However, 384 kbps high-speed packet data services might not be available when 3G services are initially launched. High-speed data services require additional BTSs, for which more users are needed to justify the associated costs. Some market watchers have said the two carriers might initially be able to provide only 64 kbps services.
Regarding 3G service prices, Keiji Tachikawa, president of NTT DoCoMo, said charges for voice services would be the same as present service costs, based on the carrier’s PDC network. But packet-data charges will be significantly less than current cellular packet-data prices. NTT DoCoMo currently charges 0.3 yen (US$0.003) per packet, or 128 bytes.
A remarkable feature of future Japanese wireless services will be enabling 3G subscribers to use their phones in foreign countries using international roaming services. Because the country’s second-generation (2G) services are based on PDC technology, unique to Japan, most Japanese handsets cannot be used outside Japan.
But once 3G services are launched in Europe, scheduled for the beginning of 2002, Japanese mobile users may be able to use their handsets in Europe. Currently, NTT DoCoMo and J-Phone are seeking international roaming alliances with carriers in Europe.
The underdog
Unlike NTT DoCoMo and J-Phone, KDDI selected cdma2000 as its 3G standard and is scheduled to launch 3G services in September 2002.
But prior to rolling out 3G services, the carrier will launch 1XRTT services using the 800 MHz band in September 2001. With 1X technology, an evolutionary technology for cdma2000, the carrier will be able to provide up to 144 kbps data transmission services.
KDDI will then launch 1X services for the 2 GHz band, the spectrum allocated for 3G services, in September 2002 and will sell dual-band terminals for the 800 MHz and 2 GHz frequencies. KDDI will introduce 1X at 2 GHz to meet demand in dense population areas, such as Tokyo, Osaka and Nagoya.
Yusai Okuyama, president of KDDI, said its services will be more attractive for consumers than DoCoMo and J-Phone’s offerings because “au”-KDDI’s brand name for cellular phones-users will be able to use data transmission services at up to 144 kbps nationwide much earlier than its two rivals.
To compete with the W-CDMA carriers, KDDI is planning to achieve 99-percent population coverage with 1X services by the end of December 2002. For high-speed seekers, the carrier is also planning to introduce High Data Rate (HDR) technology, which can provide data transmission speeds of 500 kbps to 600 kbps, for the 2 GHz band around 2004 or 2005. Okuyama said “at the moment,” the carrier is considering following the migration path to 3XRTT after HDR.
KDDI’s cdma2000 strategy has its benefits. By implementing 1X at 800 MHz, KDDI will be able to provide high-speed services at a total cost of 100 billion yen (US$917 million). Both NTT DoCoMo and J-Phone reportedly need to invest 1 trillion yen (US$9.2 billion) to launch their 3G services.
Success for 3G services is largely dependent on content, and Japanese carriers are struggling to develop “killer” content for their services. A prelude to the impending battle has already begun. Recently, all three carriers announced mobile music distribution service plans. Although the carriers will initially launch their music services to PHS subscribers, their main target is 3G users. They will soon apply the PHS services to their 3G platforms.
Tachikawa last month said NTT DoCoMo would launch music services based on two different systems and select the best system for its 3G platform. NTT DoCoMo will launch movie clip services by the end of December. This service is also a test bed for the carrier’s future video services.
