TOKYO-The number of Japanese PHS subscribers expanded in the December-January time frame, demonstrating that the long-ailing PHS business is starting to revitalize.
The number of PHS users in the country has decreased for the last few years since hitting a high of 7 million in September 1997.
According to the Telecommunications Carriers Association (TCA), a Japanese industry organization, the number of PHS subscribers at the end of January 2000 was 5.67 million, an increase of 37,000 from a month before. The number expanded in December by 53,900 subscribers.
Higher data speeds
DDI Pocket, the largest PHS carrier in Japan, contributed to the increase. During January, it successfully won 25,000 new users. Hiroki Hirasawa, general manager of DDI Pocket, explained that the increase is because of the popularity of its new Edge terminal.
Since the carrier launched its business in 1995, the main target has been high school kids. However, the new Edge terminal, which has the same voice quality as mobile cellular terminals and a higher data transmission speed (64 kilobits per second) than cellular, won popularity among young business people. Edge users reached 780,000 as of the end of January, about 23 percent of the total 3.3 million DDI Pocket users.
Hirasawa said DDI Pocket plans to further increase data transmission speed, while gearing up its Internet access services.
DDI Pocket currently provides 64 kbps service, already the world’s highest wireless data transmission speed. But in the latter half of 2000, DDI Pocket will increase the PHS data transmission speed to 128 kbps. Separately, it will launch PHS 32 kbps packet-based service by year-end.
Hirasawa said that to compete with IMT-2000 services, DDI Pocket also will launch 384 kbps services in 2001, although the service area might be limited. In Japan, NTT DoCoMo is scheduled to launch its third-generation (3G) services based on direct spread-frequency division duplex (DS-FDD) in second-quarter 2001, initially at 384 kbps.
As part of its efforts to strengthen its Internet access services, DDI Pocket launched in mid-January the Open Net Content Service, allowing PHS users to connect directly to the Internet. DDI Pocket users previously could access the Internet only by first connecting their PHS handsets to PCs or personal digital assistants. The new Open Net Content Service offers wireless Internet access similar to NTT DoCoMo’s iMode cellular service.
In addition, in February DDI Pocket kicked off a personal navigation service in cooperation with Nippon Computer Graphics (NCG). Users of the service first access the NCG Web site and input the telephone number or address of the requested company or individual. They then receive a local map on the screen of their PHS terminals. Other types of location-based information are available as well.
With these new services, the carrier is hoping to win 3.5 million PHS customers by the end of March and 4 million by the end of March 2001.
Music distribution
NTT DoCoMo, an NTT Corp. company that operates a PHS business as well as cellular, will try to revitalize its PHS business by launching new music-distribution services with PHS terminals.
Keiji Tachikawa, president of NTT DoCoMo, said 2000 is the year for the music-distribution business. At the beginning of February, DoCoMo established a new firm called Air Media for mobile music distribution (MMD) in cooperation with Matsushita Communications. NTT DoCoMo holds 51 percent, and the Matsushita company has 49 percent.
The joint firm will launch a demonstration experiment for MMD in April, targeting a launch of a commercial-based service in third-quarter 2000.
Last year, Matsushita Electric Industrial Co. established a joint firm called EMDLB with UMG, BMG and AT&T for developing a music-distribution system. NTT DoCoMo and Matsushita will employ the music-distribution system developed by EMDLB for the Air Media experiment. The EMDLB system includes copyright-protection technology and compression technology.
Later this year, Air Media will launch MMD services at 64 kbps. It will be the world’s first commercial music-distribution service using a wireless platform.
In the two-month experiment, 500 participants will download some of the 1,000 music pieces with their PHS handsets using a secure digital (SD) memory card. The SD memory card will be able to store up to one hour of music, and users can listen to the music by inserting the SD card into the portable music player.
The firm said neither the initial membership fee nor the download fee has been decided. But some news reports said the download fee will be the same as a similar service being provided by Sony Music Entertainment, which is 350 yen (US$3.15) per piece of music.
DoCoMo simultaneously will launch a similar experiment with Sony Corp. and Japan IBM in April. In the experiment, Sony will provide the media (Magic Gate Memory Stick), copyright-protection technology (Magic Gate and Open MG) and the compression technology (ATRAC3), while IBM Japan will provide a music-distribution platform technology called EMMS.
DoCoMo said it may tie up with other vendors in its music-distribution business. In December 1999, Fujitsu, Hitachi and Sanyo joined forces for developing a music-distribution platform using either a PHS or a cellular phone.
Separately, DDI Pocket is planning to launch commercial-based music distribution services by the end of 2000 by partnering with a company with all the necessary technologies for wireless music distribution, including music compression technology, replay technology and copyright-protection technology.
Service bundling
Tokyo Telecommunication Network Co. (TTNET), the PHS firm of the Astel Group, said it plans to expand its customer base by combining services with other TTNET services, such as Tokyo Denwa, a regional telephony service provider, and Tokyo Denwa Internet, an Internet service provider.
Yosuke Gomi, spokesperson for TTNET, said the recent rebound in the number of PHS subscribers is because customers are reconsidering PHS’ superior characteristics, such as lower communications rates and higher voice quality.
3G threat
Currently, both data transmission speed and voice quality of PHS are superior to that of cellular phones. However, IMT-2000
services, which promise to improve cellular voice and data quality, will launch in second-quarter 2001.
DDI Pocket’s Hirasawa said that even compared with IMT-2000, PHS offers better data transmission services, and even the present PHS system provides 64 kbps and soon 128 kbps service, while current PDC cellular systems offer data services only at 9.6 kbps.
“If these cellular carriers jump up their speed to 384 kbps, their spectrum will be running out soon,” he said.
Recently, the Japanese government announced it will allocate 15 megahertz of spectrum for each of the three 3G carriers. Many market watchers say the bandwidth is not enough to accommodate the rapidly swelling number of cellular users.
However, 3G services with high-speed data transmission of 384 kbps and high voice quality equivalent to fixed telephony are a looming threat for the PHS business. To compete with the advanced services, PHS carriers must make a further effort to provide not only killer content, such as music distribution, but also other attractive services to their customers.
