To: Ruffian who wrote (9928)
From: Cooters Thursday, May 11, 2000 7:44 AM ET
Reply # of 9939
Ruff, An update to the previous DDI article with some additional information.
DDI Confirms Choice of New Phone Service Standard
Tokyo, May 11 (Bloomberg) -- DDI Corp., Japan's No. 2 mobile phone operator, said it will use a cellular phone standard developed by U.S.-based Qualcomm Inc. for a new generation of services, breaking with Japanese rivals already committed to a competing technology.
DDI will choose Qualcomm's cdma2000 standard as the technology with which to develop a set of services which promise to deliver better and faster mobile Internet connections, including the ability to watch video and download music, said a senior executive at DDI who did not want to be named.
The company said it will officially announce its strategy for high-speed cellular phone operations tomorrow, when the government stops accepting applications for licenses to operate the services.
DDI is expected to join rivals NTT DoCoMo Inc., Japan's dominant mobile phone company, and Japan Telecom Co., the nation's No. 3 mobile phone operator in seeking one of the three licenses up for grabs. The approvals will be granted as early as June.
NTT DoCoMo and Japan Telecom have said they will base their services on the W-CDMA standard developed by DoCoMo, Sweden's Ericsson AB and Finland's Nokia OYJ.
The three winners will join a worldwide rush to develop a new set of so-called `3G' mobile phone communications which will be able to send data 200 times faster than current cell phone technologies. To do that, operators will have to choose between cdma2000 or W-CDMA, which are vying to become the global standard.
At stake is a market the Ministry of Posts and Telecommunications expects will grow to 42.02 trillion yen by the year ending March 2011.
Shares
DDI, looking to save on its initial investment in new networks, chose cdma2000 because it already uses a cell phone technology from Qualcomm, the DDI official said. Qualcomm is developer of the world's fastest-growing cell-phone standard, which is called code division multiple access and is used by 50 million people.
DDI now provides a product called cdmaOne, which is capable of sending data faster than most existing services in Japan.
DDI said it will be able to develop 3G networks cheaper by relying on cdmaOne and existing infrastructure as a springboard in developing the new technologies.
DDI also believes cdma2000 is the right choice because it will probably become the standard in the U.S., a market with the potential to expand more than in Europe, where W-CDMA is expected to be widely adopted.
Investors aren't so sure. DDI shares fell 13.68 percent to 1.01 million yen on concern DDI's choice will hamper its ability to compete with NTT DoCoMo.
``Although we can't picture the market for third-generation phone services, investors have the impression DDI has chosen a minority standard,'' said Toshiyuki Fukushima, a fund manager at Sumisei Global Investment Trust Management Co. ``And they're also concerned it will face tough competition against NTT DoCoMo.''
DDI in October will acquire IDO Corp., the cell phone unit of Toyota Motor Corp. and KDD Corp., Japan's largest international carrier. KDD shares fell 12.31 percent to 10,400. IDO is privately held.
The 6-member TOPIX Communication Index fell 365.83 points, or 7.2 percent, to 4711.39. NTT DoCoMo, Japan's largest company by market capitalization, fell 6.7 percent to 3.34 million yen amid a broad sell-off in telecommunications shares.
May/11/2000 2:51 GMT |
