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To: Eric L who wrote (8565)	12/15/2000 8:53:25 PM
From: Eric L	Respond to of 34857

>> Across A Greater Divide: Will DoCoMo’s (AWS) i-mode Formula Succeed In U.S.? Brad Smith Wireless Week December 12, 2000 wirelessweek.com Influenced by the $9.8 billion investment from NTT DoCoMo, AT&T Wireless will be setting up a new subsidiary over the next few months to develop and manage all of its mobile Internet services. The Japanese carrier’s runaway success with its i-mode service back home will be a model for the new company, but just how well will that success translate to a wholly different culture? With i-mode penetration rates in Japan reaching fully 50 percent of DoCoMo’s 33 million wireless subscribers, the industry is closely watching the new DoCoMo-AT&T alliance to see if it ignites the nascent U.S. market sector. AT&T Wireless, for instance, has 15 million subscribers, of which only 300,000, or 2 percent, have signed on since May for its re-launched PocketNet wireless Internet service. Those who think i-mode can’t be exported to North America because of cultural reasons, however, may be missing the true genius behind the service. There may be too much attention paid to the content that excites i-mode’s Japanese users and not enough focus on the carrier’s business model that has generated a compelling interest in content. Several people familiar with DoCoMo’s success say it is due in large part to a billing structure that emboldens content providers. The carrier allows i-mode content providers to bill users through the carrier’s network. By dangling that carrot, the carrier has helped create thousands of applications its subscribers want, whether it is receiving a daily cartoon character, reserving concert tickets or checking bank balances. While DoCoMo allows content providers to bill for content delivery through its billing system, the carrier takes a 9 percent cut, giving the content provider freedom from billing headaches as well as immediate access to DoCoMo’s subscribers. DoCoMo also charges subscribers by the kilobyte for data, a strategy that most analysts don’t think will work in the United States, where subscribers are used to a flat access rate. As part of NTT’s investment, AT&T Wireless agreed to install an overlay GSM/GPRS network for 40 percent of its covered population by the end of 2001. GPRS is a packet network, as is DoCoMo’s current and future network. Thomas Trinneer, AWS data product development vice president, says the carrier plans on using its current cellular digital packet data overlay for the new content and services, which will be developed by the new subsidiary. The subsidiary, which will be created over the next 90-120 days, will set up wireless portal services and have exclusive rights to the i-mode brand and technology. AWS will not tear down what it has already built, but it will work closely with DoCoMo to take advantage of the lessons to be learned from i-mode’s success. Some people have predicted that i-mode’s success is the death knell for the Wireless Application Protocol. But, as previously reported by Wireless Week, those standards likely will merge. And, illustrating that DoCoMo is more interested in i-mode as a business venture than a technological one, the carrier actually is encouraging the use of i-mode and WAP together in at least one market. NTT DoCoMo has a 19 percent stake in the Hong Kong carrier Hutchison Telecom, which has a GSM network that earlier implemented WAP services using the WAP server technology of what was then Phone.com Inc., now merged into Openwave Systems Inc. Hutchison is using WAP to access i-mode content by using a translator to convert i-mode’s compact-HTML content to wireless markup language, says Ben Linder, Openwave’s marketing vice president. That means subscribers can use their WAP handsets for i-mode content. The most popular i-mode service in Hong Kong is a car racing game. Linder thinks cultural differences in content may not export well from Japan, but just because Americans are not obsessed by the Japanese "Hello Kitty" dolls or i-mode cartoons doesn’t mean similar content won’t work in the United States. Openwave studies have shown Americans would pay a small monthly charge, say 99 cents, to have a new Dilbert cartoon on their handset every day. Those small charges are what adds up to the $12-to-$15 monthly increase in incremental revenue per user that DoCoMo realizes from i-mode. It’s somewhat like the old saw about running a marathon: You have to do it one step at a time until the steps add up to 26 miles. That’s the race AWS thinks it is entering. << - Eric -