NYT -- Trying to Attract Cell Users to Next Wireless Generation
October 8, 2001
Trying to Attract Cell Users to Next Wireless
Generation
By KEN BELSON
TOKYO, Oct. 7 — Toshiyuki Ohno
hardly looks like a foot soldier in Japan's
mobile phone revolution. But that is what
he is, and so far it is a fairly lonely patrol.
For the last two years, Mr. Ohno, a 37-
year-old software programmer, has tested
handsets on a freelance basis for Japan's
largest and most innovative cellular operator,
NTT DoCoMo, which began selling the
world's first third- generation phone service
last Monday. Mr. Ohno tested the
top-of-the-line $510 handset for three months
in the service's trial period and bought his own
handset when the new phones reached stores
last week.
With the world watching, DoCoMo
stage-managed its introduction of the new
service, distributing only 4,000 handsets to 260
shops in Tokyo. All the handsets were sold the
first day, and most stores expected to wait a
week more for replacements.
But the phones, which promise Internet
connections fast enough to download audio
and video files, snap and send photos and hold
teleconferences, do not impress Mr. Ohno.
Like others, he said he would not use most of
the new functions because they cost too
much. He bought one of the new phones, he
said, partly because he got a discount and
partly because he thought his friends would
buy one, too. They did not.
"Everyone is impressed when they see my
phone," Mr. Ohno said, "but they don't want to
buy them because they are too expensive."
That is hardly the endorsement the
telecommunications industry here had hoped
for. DoCoMo plans to spend $8 billion the next
three years to make this third-generation
service available nationwide. The so-called 3G wireless technology generally
refers to networks capable of connecting to the Internet at speeds 40 times the
rate of current cellphones.
The company does not expect the 3G network to turn a profit until 2004, by
which time it predicts it will have six million subscribers. The initial success of
the new service in Japan will also partly determine how quickly DoCoMo might
try to offer similar services through its partnerships with AT&T Wireless
(news/quote) in the United States, KPN Mobile in the Netherlands and Hutchison
3G UK Holdings in Britain.
At the same time, competitors overseas, which spent about $100 billion in
government auctions to acquire the needed radio spectrums to offer such
services, will be watching DoCoMo's experience to see if money can be made.
"Our deployment plan is quite conservative," said NTT DoCoMo's president, Keiji
Tachikawa, who is mindful of the bad publicity his company received last year
when the computers driving its i-mode wireless voice and text-messaging
network crashed several times.
Mr. Tachikawa is also wary of drawing his highest-paying customers away from
the i-mode service, which has 27.5 million users and is a cash cow. He, as are
other mobile phone executives in Japan, is trying to increase the amount users
spend on data services to offset slowing demand for voice services. But he does
not want subscribers to abandon i-mode phones immediately, before the new
system proves its reliability and has enough multimedia material to satisfy its
customers.
The new 3G service is designed to steer customers into using more data
functions like e-mailing a photo or downloading a song from various Web sites
that will pay DoCoMo a royalty for linking to the network. Users who choose the
highest-priced monthly service, at 15,000 yen ($125), get a large block of free
minutes and a cheaper per- minute charge if they exhaust their initial allotment.
Lower-priced plans include fewer free minutes and higher per-unit charges. For
example, the cost of downloading a one-megabyte song on the least-expensive
monthly service plan would be 1,563 yen, or $13. Over all, DoCoMo expects 3G
customers to spend about 10,000 yen ($84) a month, 20 percent more than
current i-mode users.
[Re : bold print section -- are they (NTT DoCoMo) nuts ?]
Mr. Ohno is not taking the bait just yet. He still keeps his i-mode cellular phone,
which costs about $30 a month to use, tucked in his right breast pocket. The
phone, he says, has good sound quality. Unlike the 3G service so far, it can be
used outside Tokyo. And at just more than three ounces, it is only about half the
weight of his blue, clamshell- size 3G phone.
More important, the new phones have only a few compatible Web sites.
"DoCoMo already has pretty good handsets, so customers need some
discriminating services if they are going to be convinced to buy new 3G phones,"
said Lalita Gupta, an analyst at Morgan Stanley in Japan. "This rollout is going to
be a quiet affair."
Copyright 2001 The New York Times Company |
