Interview with J-Phone president....lots of info. on IMT-2000 launch.
nikkeibp.asiabiztech.com
J-Phone Group Targets 30 Pct. of IMT-2000 Market Share, CEO Says
September 14, 2000 (TOKYO) -- J-Phone Group, NTT DoCoMo Inc. and DDI Corp. were granted licenses in June to operate next-generation IMT-2000 mobile phone services in Japan, and among them, J-Phone Group seeks a 30 percent share of that market.
Koichi Sakata
Although J-Phone plans to employ the same type of technology as NTT DoCoMo, it aims to compete by offering speedier transmission speeds and by expanding its service areas more rapidly. Nikkei Communications interviewed J-Phone's CEO, Koichi Sakata (also chairman of Japan Telecom Co., Ltd.), on his firm's IMT-2000 business strategy.
Nikkei Communications: Waveband allocations for Japan's third generation (3G) -- or International Mobile Telecommunications - 2000 (IMT-2000) -- wireless services were decided upon at the end of June. What are your views on how things turned out?
Sakata: J-Phone obtained a great result. When J-Phone filed its license application, we said our IMT-2000 services for Tokyo, Osaka and Nagoya were scheduled to start in December 2001. However, now it looks like J-Phone will be able to bring the launch date forward to October 2001, a couple of months earlier than originally expected. And, from April 2002 our service area will cover most other major cities. From 2003 the service will be extended to cover the entire nation.
Competing with DoCoMo with 128kbps Speed, Fast-Growing Service Area
Q: What's your strategy for competing with NTT DoCoMo? After all, its 3G services will be launched first, in May 2001.
Sakata: J-Phone will offer transmission speeds of up to 128kbps throughout its service area from the time of the service launch. That's our biggest selling point. Also, J-Phone has solid business and investment plans in place to make sure we can increase service-area coverage -- and reach a higher percentage of people within that service area more rapidly than NTT DoCoMo.
Q: What pricing levels will J-Phone offer, to attract more customers?
Sakata: We haven't finalized such details yet. But there won't be a great difference between the charges for our current services and those for 3G services.
J-Phone commands a 16 percent share of Japan's mobile phone market. However, as for the IMT-2000 services, we intend to grab more than 30 percent of the market from the start.
Q: What significance does IMT-2000 have for J-Phone company?
Sakata: J-Phone entered the mobile phone market more than ten years after NTT DoCoMo. Thus, we have always had the disadvantage of being less well known and haven't enjoyed a comparable level of customer awareness. However, with IMT-2000 services the playing field will be even again -- all three competing groups will launch their services at about the same time. And for J-Phone, that is what is going to make things so different this time round.
Move to Packet Technology in 2001
Q: Are you thinking of using packet data technology for your data communications services?
Sakata: We are already gearing up for it. And when IMT-2000 services start, our personal digital cellular (PDC) services also will move to packet technology.
Q: How about employing Internet Protocol (IP) in your wireless services, and then using voice over IP (VoIP)?
Sakata: Certainly in the longer term, IP is the way we are going. Also, it's true that wireless networks are undergoing a transition from being based mainly on voice traffic to being based mainly on data traffic.
Q: Is it possible that you will introduce a system of fixed-charges for your mobile phone services?
Sakata: J-Phone now provides a circuit-switching data transfer service for mobile phones. Our J-Sky Web service has a pricing system based on surcharges for the volume of data transferred. IMT-2000 services will likely have the same type of pricing structure.
Q: What about the idea of using high-speed IMT-2000 mobile phone lines as a way of accessing broadband services?
Sakata: Of course. An IMT-2000-based 2Mbps service would be good enough to rival integrated services digital network (ISDN) technology. Customer expectations regarding broadband services are growing, so we are thinking of taking on ISDN with a 2Mbps service.
Developing Infrastructure Using a Multi-Vendor System
Q: Does J-Phone have any special tricks up its sleeve regarding the way it is planning to implement its IMT-2000 infrastructure?
Sakata: We are considering the of use of a multi-vendor system. But initially -- for all the base stations and exchange equipment to be installed in Tokyo, Osaka and Nagoya -- J-Phone will only work with one partner, Sweden's LM Ericsson.
From April 2002, J-Phone will move to a three-company system with the addition of Nokia Corp. and NEC Corp. The idea is that those three vendors will then compete on the basis of price, service, after sales service and other factors.
Q: What advantages are there in your cooperative relationship with the U.K.-based Vodafone group?
Sakata: J-Phone will basically be responsible for Vodafone's business operations in Asia. Including J-Phone, the Vodafone group boasts worldwide user numbers in excess of 110 million subscribers. The sheer size of that customer base makes it easier to obtain cooperation from equipment makers. Also, carrying out R&D work and acquiring financial resources become smoother and faster, and we can also make use of common applications developed for use on a global basis.
Q: Will J-Phone need to offer dual-use phones that can be used with either the current PDC or the IMT-2000 systems?
Sakata: J-Phone plans to expand its IMT-2000 service area very rapidly, and for this reason we won't have to market dual-use handsets capable of handling both systems. However, if the planned service area expansion runs into any problems and if customers do start to demand them, then we will need to reconsider. It takes about a year to develop a new commercial wireless phone handset, so that possibility is something we are already looking at closely.
Profile of Koichi Sakata
Born in 1928, he graduated from Waseda University in 1951 after studying mechanical engineering and he joined Japan National Railroad (JNR) the same year. In 1986, Sakata was appointed CEO of JNR's telecommunications unit, which became Japan Telecom. Since June 1998, Sakata has served as Japan Telecom's chairman, and since November 1998 he has concurrently served as CEO of J-Phone. (J-Phone itself was formally established in April 2000, but its forerunner was an IMT-2000 planning company set up by three firms - Japan Telecom, Nissan Motor Co., Ltd., and the then U.S.-based Airtouch International, now a part of Vodafone Airtouch Plc.) |
