TOKYO-NTT DoCoMo, the leading mobile carrier in Japan, on 1 October launched the world’s first third-generation (3G) mobile service in the Tokyo metropolitan area, receiving mixed reviews from market analysts.
The visual phone, one of three 3G terminals, with a small camera and a large screen, sold out on the first day, although the basic terminal, which provides i-mode services at up to 384 kilobits per second (kbps) is still available at stores. As of 17 October, 10,400 people had signed up for the new service.
Keiji Tachikawa, president of NTT DoCoMo, said he is satisfied with the start of the service. “We hope carriers in Europe will launch their 3G service, keeping their schedule following us,” he said.
The commercial launch of the 3G service called FOMA was delayed from 30 May to 1 October because of technical problems with the wideband-CDMA (W-CDMA) service. Although FOMA is now commercially available, the service area is strictly limited to the Tokyo metropolitan area. NTT DoCoMo is planning to expand the service area with service launches in Osaka and Nagoya in December 2001 and in all major cities around the country in the second quarter of 2002.
As the service area expands, DoCoMo is targeting to expand the customer base, although the first-year target is a moderate 150,000 users. However, it is expecting to win 6 million users by March 2004 and 17 million as of March 2005.
At press time, there had been no significant technical troubles with FOMA. However, FOMA is not offering completely satisfactory service-communications are cut off during conversations or Internet access; the service tends to fail to carry out soft handovers from one base station to another; the handset battery life is short; and content is limited.
FOMA’s unsatisfactory performance is due mainly to its insufficient networks. According to NTT DoCoMo, it constructed about 530 base stations in FOMA’s service area, the central part of the Tokyo metropolitan area. Comparatively, DoCoMo maintains 1,900 base stations for 2G services in the same service area. Because the 3G service is in the 2 GHz band, it requires more base stations than 2G services, which is based in the 800 MHz band.
Tachikawa said the firm is planning to construct more base stations to strengthen the networks, while gearing up a study for further improving its 3G technologies, including the connection rate and preventing sudden dropped calls.
“It is impossible (for anybody) to provide perfect services based on a completely new, innovative technology from the beginning,” he said.
Although the service menu is currently limited, DoCoMo plans to launch new, sophisticated services fully using the unique features of 3G technology. iMotion, a motion picture clipping service, is scheduled to launch by the end of this year, and M-Stage Visual, a motion picture distribution service, and M-Stage Music, a music distribution service, are scheduled to begin in the second quarter of 2002. In addition, DoCoMo is going to launch international roaming, mobile commerce services and location services for FOMA in mid-2002.
Initially, only three types of FOMA terminals are available-the basic terminal manufactured by NEC and the visual phone and card-type terminal manufactured by Matsushita Communication Industrial. The basic terminal is selling at around 39,800 yen (US$326), the visual phone is around 59,800 yen (US$490), and the card type is selling at 19,800 yen (US$162).
DoCoMo plans to launch a larger variety of FOMA handsets soon. Currently, several other vendors, including Toshiba, Sharp, Mitsubishi Electric, Sony, Nokia and Ericsson, are developing a variety of FOMA handsets.
Mixed reception
Nobuhiro Sawaki, an analyst at JP Morgan, said DoCoMo will be able to assume an advantageous position in 3G by successfully launching services earlier than any other carrier in the world.
“NTT DoCoMo has successfully constructed the infrastructure which provides the ultra-high-speed data services. If DoCoMo allures its users by providing very unique applications fully utilizing the 3G networks, DoCoMo will win an advantageous position in the 3G era,” he said.
Yasumasa Gota, an analyst at Merrill Lynch Japan, on the other hand, said that FOMA is a long-range service that will improve over time, and it is meaningless to discuss the success or failure of FOMA right now.
“NTT DoCoMo is targeting to have 6 million users-that is just 15 percent of the current DoCoMo cellular phone users-by the end of March 2004, in two and a half years. It is more important for NTT DoCoMo to facilitate perfect services for its 2G users. DoCoMo is considering providing perfect FOMA service within 2.5 years,” he said.
Distributors also said it might take some time for 3G to take off. A salesperson at Bic Camera, a large distributor for consumer electronics in Tokyo, said FOMA terminals sold well just after it started the service, but not so well recently, partly due to its high prices and partly due to the insufficient networks.
“When the 2G services started, the networks (for 2G) were not sufficient. As the networks for 3G are strengthened, usability improves and then demand for FOMA may expand,” the salesperson said.
