'Fixed Rate Pricing Scheme May Not Work for 1xEV-DO,' Says KDDI President
December 24, 2002 (TOKYO) -- Tadashi Onodera, president of KDDI Corp., disclosed the company's future mobile phone business direction during a press conference.
Referring to the general mobile phone market in Japan, he predicted, "The net increase in cellular phone subscribers in 2003 will be around 5 million, as the market already is mature, with the total number of users exceeding 70 million." He added that with 1xEV-DO, short for 1x evolution-data only, which is a high-speed cdmaOne packet communication technology, telematics service and services for enterprises will become important.
The 1xEV-DO technology, developed based on cdmaOne, will offer high-speed communications capability optimized for packet data services. The speed will reach an average of 600kbps downstream (maximum of 2.4Mbps). It also is based on High Data Rate (HDR) technology of U.S.-based Qualcomm Inc.
The company plans to start a trial service of 1xEV-DO in April 2003. KDDI has been saying that the pricing for this service could be a fully fixed rate scheme to reduce packet communications costs by introducing 1xEV-DO. But the firm now says, "A completely fixed charge rate may be difficult to implement, because many users will share the limited radio availability in the mobile service. We are considering methods to place a limit on the speed or on the number of packets to be serviced." This way, the company expressed an intention to put some restrictions on the service level.
As for the communication fee, "Even the present discounted price of 0.1 yen per packet is still too high. If we introduce the 1xEV-DO service, the bit cost will become dramatically lower than the current CDMA2000 1x service." But the president did not mention any specific price.
In regard to telematics and enterprise services, he explained an on-going move by referring to the "G-BOOK" service started by Toyota Motor Corp. early in 2002 and location information provision services for enterprises called "GPS-MAP."
"As the market is becoming saturated, we expect little growth in the consumer service market. We would like to enlarge the market by developing new opportunities for enterprise services and creating demand for terminals for specialized purposes," he added.
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