TOKYO-In reaction to the Japanese government’s announcement it will limit to three in each district the number of carriers providing IMT-2000 services, cellular carriers here have started playing musical chairs, struggling to get one of the three seats by forming new strategic partnerships.
NTT DoCoMo, the DDI Corp.-Nippon Idou Tsushin Corp. (IDO) alliance and the Japan Telecom (JT) Group are believed to have secured seats. All already have launched either an in-lab or field test for third-generation (3G) services, though their system choices are different. DoCoMo and JT promote W-CDMA (wideband Code Division Multiple Access), while the DDI-IDO alliance is promoting cdma2000, the next generation of cdmaOne.
Meanwhile, Tu-ka Cellular Group, Nissan Motor Co. and Kokusai Denshin Denwa Co. (KDD) also are trying to stake their positions.
According to the Ministry of Posts and Telecommunications’ (MPT’s) Basic Guideline for Introducing the IMT-2000, released on 29 July, businesses will be granted a tentative license for IMT-2000 (International Mobile Telecommunications-2000) in the first half of 2000 at the earliest.
DoCoMo, the leader on W-CDMA, launched its in-lab test in June and plans to launch a field test this fall. The carrier ordered base stations and terminals necessary for the test from 10 venders worldwide and will invite other carriers and vendors to its field test as well.
IDO and DDI are proponents of cdmaOne in Japan. DDI kicked off cdmaOne service in July, and the service is scheduled to spread nationwide next spring. The two companies recently established within DDI a new office for developing cdma2000 and are scheduled to launch jointly a field test next spring.
JT, a subsidiary of Japan Railway and the parent company of Digital Phone Group and Digital Tu-ka, in May launched a field test for W-CDMA.
Tu-ka Cellular Group, which has a different ownership structure than Digital Tu-ka, has not made its position on IMT-2000 clear. One reason is the financial complexity of the group. The group’s two regional companies-Tu-ka Cellular Tokyo and Tu-ka Cellular Tokai-are 50-50 joint ventures of Nissan Motor Co. and DDI, while Tu-ka Phone Kansai is mainly owned by Nissan. (Digital Tu-ka’s main owners, in contrast, are JT and Nissan.)
Some news reports have said Tu-ka Cellular will join the JT Group, forming the third party, but both groups denied the report.
The MPT in June submitted W-CDMA to the International Telecommunication Union as the Japanese proposal for IMT-2000. Japan’s Association of Radio Industries and Businesses (ARIB), along with 14 standardization organizations from 11 countries, is examining all of the submitted proposals.
Based on the basic parameters, the MPT next April will decide domestic standards for IMT-2000, and it is believed the government will take up all the standards the ITU selects. After then spending about six months working out regulatory details, the government will release guidelines for the new service and start accepting business applications in the fall of 1999 at the earliest.
Carriers that win tentative licenses then would conduct field tests for about one-and-a-half years before they would obtain the actual operating licenses.
Carriers lead efforts
Unlike other countries, in Japan the IMT-2000 issue has been led by carriers. In fact, W-CDMA has been developed and promoted by DoCoMo. Due to its own promotional effort, in cooperation with the government and ARIB, DoCoMo successfully has won support for the system from foreign carriers and vendors.
Upon agreement between former JT President Koichi Sakata and NTT DoCoMo Chairman Kouji Ohboshi to try and make W-CDMA the international standard, the JT Group is promoting W-CDMA development.
According to Haruo Murakami, current JT president, both firms are exchanging data, but separately promoting W-CDMA. Both firms hope W-CDMA will be chosen as the sole international 3G standard.
On the other hand, DDI and IDO, which have had painful experiences with their digital services based on the NTT-derived PDC (Personal Digital Cellular) standard, launched cdmaOne services in July because they believed they would have the same problems if they again chose an NTT standard. The two companies agreed to jointly develop third-generation cdma2000.
Despite such efforts, DDI spokesperson Mamoru Miyoshi said the two firms also would support 3G harmonization.
Work to merge standards
Due to rapid subscriber expansion, some Japanese carriers are running out of allocated spectrum. DoCoMo, with 20 million subscribers, needs to launch IMT-2000 services in the beginning of 2001 to relieve congestion.
To allow carriers to kick off W-CDMA service in early 2001, ARIB five years ago established the IMT-2000 Study Group within its organization. Since then, the study group has been working to eliminate differences between cdma2000 and W-CDMA. According to Masayoshi Wakao, ARIB’s managing director, study group participants have found solutions for almost every issue.
The reported differences between the two proposed standards involve the chip rate (cdma2000 employs 3.686 Megachips per second while W-CDMA employs 4.096 Mcps); synchronization-asynchronization between base stations (cdma 2000 is synchronous while W-CDMA asynchronous); and channel composition.
Wakao said the study group has worked out solutions for the last two. The sole remaining serious issue is the difference in chip rates.
Because both the Japanese government and ARIB hope to establish the sole international standard for 3G, they are trying to merge the two proposals.
“We are seeking … the sole international standard because it is more beneficial for customers,” said ARIB’s Wakao. “If parties in the standardization process agree to a certain system based on superiority in the technology, it’s fine. We don’t care which is chosen.”
However, Europe and the United States are insisting on their ideas and do not offer any compromise, explained Yasuo Tawara, deputy director of the MPT’s Land Mobile Communications Division. ARIB has been negotiating with the European Telecommunications Standards Institute and the United States’ Telecommunications Industry Association and T1P1 committee through both official and unofficial channels.
Japanese carriers, which have led international standardization of W-CDMA, now seem to have turned the job over to the government and ARIB.
Others in the game
Although the three existing players seem to be in the lead for winning a position to launch the new services, other businesses are hoping to enter the 3G business as well.
In July, KDD and Teleway announced they agreed to merge on 1 December. At the press conference announcing the merger, KDD President Tadashi Nishimoto said the new firm will gear up cellular business in cooperation with IDO.
Teleway is a subsidiary company of Toyota Motor Corp. Upon merging, Toyota would become the second-largest shareholder of the new KDD. Toyota is also the parent company of IDO.
However, KDD last May launched an in-lab test for W-CDMA in the Saitama prefecture and is scheduled to launch a field test in Tokyo next October. IDO is promoting cdma2000 with DDI.
Yutaka Yasuda, director of KDD’s IMT-2000 Business Development Office, said the differences between cdma2000 and W-CDMA are small, so KDD can switch its system to cdma2000. “Even if KDD decides to launch cdma2000 services, results of the field test will help the company greatly.”
Although Tu-ka Cellular Group has not disclosed its position toward IMT-2000, the three regional companies in the group are participating to Nissan’s in-lab test for IMT-2000. Nissan will conduct a field test for W-CDMA at the firm’s factory site in 1999, aiming at launching W-CDMA services in 2001 with Tu-ka Cellular Group, according to
Ritsuko Harimoto, spokesperson for Nissan.
DoCoMo, which seems to have a rosy future with W-CDMA, meanwhile has spent gloomy d
ays recently because of the troubled Japanese economy.
NTT DoCoMo is planning to list its stock on the TSE exchange this fall to cover its reported 2 trillion yen (US$13.7 billion) investment costs for constructing the necessary nationwide facilities for IMT-2000. However, the firm’s planned listing might be pushed back because the government may release part of NTT’s stock this fall to cover some of the expenses the government will incur to rescue depositors of bankrupt banks.
Currently, 65 percent of NTT’s stock is owned by the government. If NTT stock is released, then listing NTT DoCoMo might not be admitted due to concerns about the overflow of stock in the market. Then DoCoMo may have to reconsider its plans for IMT-2000.
