AT&T and DoCoMo: What Next?
by Richard Adhikari
[ December 22, 2000 ]
NTT DoCoMo's purchase of 16 percent of AT&T Wireless is generating a lot of industry buzz. Wireless telephony standards are evolving, and the AT&T partnership with DoCoMo is part of a wave of changes sweeping through the market.
AT&T hints that the purchase could lead to easier global roaming, because it will implement various protocols widely used in Asia and Europe and run DoCoMo over those. But some skeptics disagree, citing the fact that there are different methods of implementing GSM, which essentially rules out a unified wireless protocol. Worse, DoCoMo may not see the same success in the U.S. as it did in Japan, where factors essential to its dominance there won't apply, observers say.
Meanwhile, some third-party content providers fear that AT&T will be able to put the squeeze on them because it will get exclusive U.S. rights to i-Mode phones. Skeptics say that's a long time off, because implementing i-Mode will not be easy.
Obviously, AT&T has a rough road ahead. Is the partnership going to work? Will i-Mode triumph in the U.S.? Will we have a global wireless telephony protocol at last?
The Tower of Babel
Cell sites use a dizzying variety of protocols to talk to handsets. One protocol is TDMA, used by both AT&T and Cingular Wireless, the mobile phone joint venture between SBC Communications and BellSouth. Cingular also uses another protocol, GSM, and AT&T plans to add GSM as a layer on top of TDMA. Verizon and Sprint use CDMA, which is strongly supported by QualComm. DoCoMo uses PHS, while AT&T also uses CDPD for its data-only PocketNet service.
In time, GSM will evolve to General Packet Radio Service (GPRS), which has peak speeds of up to 56Kbps with an average of 28.8Kbps -- this will take the form of 2.5G, a planned intermediate technology on the way to Third Generation (3G) wireless. GPRS will then evolve to EDGE, a 3G technology that offers peak speeds of 384Kbps. GSM and TDMA don't talk to each other, but EDGE will let them do so, because it's a standard that's common between the two. The other 3G choice is UMTS, also known as wideband CDMA. UMTS comes in two flavors: CDMA 2000, backed by QualComm, and W-CDMA, backed by the European handset manufacturers, which has been widely installed in Asia and Europe and is backwards compatible with EDGE and GPRS.
One Protocol, One Standard?
AT&T has already begun deploying GPRS and GSM on top of TDMA and CDPD, and expects to push these new protocols out to 40 percent of its POPs in the U.S. by end 2001. POPS is telco slang for "population covered" -- the number of people a telco's service is available to. At the end of 2001, AT&T will begin deploying EDGE. Through 2002 and 2003, AT&T will deploy GPRS and GSM to the rest of its POPS in the U.S. while simultaneously deploying EDGE and UMTS.
This massive push, combined with various international partnerships, will give AT&T global reach, says Ken Woo, the firm's director of corporate communications. "When you talk about GPRS and EDGE and UMTS, which is put out by a lot of carriers in Europe and Asia, and consider that we have strategic alliances with British Telecom as well as DoCoMo, you can see where we're going," Woo says. "One of the aims is to give you a set of services you can personalize and use around the world."
But that's not possible, says Dale Gonzalez, vice president of wireless development at Air2Web Inc. "AT&T has a history of absolutely crushing a technology others make something out of," Gonzalez says. "Look at Sprint -- they managed to make major headway with offering the wireless Internet. AT&T had that two years before Sprint and never made it out of joke status." Kristopher Tyra, Chief Technology Officer of HiddenMind Inc., also says the move towards GSM "will be a long, hard road, and I don't expect the competition to sit back and do nothing."
Then there's the problem of the non-uniform protocol. "Just the fact that AT&T and NTT (which owns DoCoMo) are connected doesn't mean they have the same systems," says Dan Barahona, Director of Business Development in the wireless division of AppStream, Inc. "Every country has its own standard." For example, Cingular Wireless offers GSM in California on the 1.9-GHz band, while European countries using GSM employ the 900-KHz band, says Kris Rinne, Cingular's vice president of technology and product realization.
AT&T and DoCoMo face another problem: They use different protocols to communicate between cell sites and handsets. AT&T uses TDMA and will use GSM and GPRS while DoCoMo uses PHS, a proprietary standard. "Until both DoCoMo and AT&T get to Wideband CDMA, which they're both talking about, that piece is not going to be common," Rinne says. And, even then, it's not going to be easy.
Nevertheless, both AT&T and DoCoMo appear confident that their partnership will work. Analyst Cliff Rathkind of Strategy Analytics Inc. says the agreement between the two "makes each the other's 'primary and preferred partner' for global roaming initiatives, providing seamless support for multinational corporations."
Business, Anyone?
If the partnership is to succeed, DoCoMo must appeal to business users.
DoCoMo's success in Japan hinges on the peculiarities of that country. "One reason i-Mode is successful in Japan is that Internet penetration there is very low, so people have no choice but to use i-Mode for communicating," says Ali Pichvai, CEO of Net2S Inc., an international communications technology consulting firm. "Here in the U.S. you do have a choice."
Worse still, most of DoCoMo's applications are consumer-oriented, while the big market in the U.S. is the enterprise sector. "Entertainment is pretty popular in Japan, but that's not the case in the U.S.," says Tom Hunt, vice president of marketing at Pumatech Inc., a maker of software for mobile internet access. Joe Ryan, vice president at Funk Software Inc., a provider of wireless-application authentication systems, says DoCoMo "is the premier wireless operator worldwide, and where it really has succeeded is in putting together a suite of all kinds of different services, from games to information to just crazy things like different kinds of ring tones on users' cell phones which they can select."
DoCoMo isn't all play and no work, however; it does offer some business applications and more will be on the way. Gurminder Singh, CEO and president of NewsTakes Inc., a multimedia content provider now in talks with DoCoMo, says DoCoMo runs "a lot of banking applications" on i-Mode phones. And corporate interest in DoCoMo is growing in Japan. "DoCoMo has been selling our Intellisync Anywhere into the enterprise organization in Japan to tie i-Mode phones back to Microsoft Exchange and Lotus Notes," Pumatech's Hunt says.
Meanwhile, "some large Japanese corporations are interested" in getting FunMail Inc. to build animated corporate logos and brand names for the DoCoMo network, says FunMail CEO Adam Lavine.
It won't be too difficult for vendors of existing wireless applications to plug in a hook to DoCoMo, either. AVT Corp. could easily tailor its unified messaging product for wireless devices to run over DoCoMo's network, says Joe Staples, the firm's executive vice president, corporate marketing and emerging technology. "It'll just require a translation on the front end to add DoCoMo on," Staples says.
AT&T's Woo says the firm is "signing up ASPs who are working with us to build on top of the advanced wireless technology platform advanced content and services that go beyond the 3G specifications." He declined to be more specific.
Strategy Analytics' Rathkind, who has written a report on the AT&T-DoCoMo tie-in, says that the most compelling applications i-Mode will enable are data, video, e-mail, high-quality music downloads, and streaming media.
i-Mode Rules...
If DoCoMo can crack the corporate market, its success will hinge on whether the i-Mode phone will succeed here in the U.S.. It has in Japan -- there are 13 million i-Mode users in Japan, says Salim Samaha, director of business development at GeePS.com, an m-commerce ASP. That figure will grow by almost 30 percent, or four million, by the end of the year, Samaha says.
FunMail's Lavine says i-Mode will "catch fire in the U.S. and around the world because it uses an IP-based network which makes it easier for people to deploy their legacy content on DoCoMo's Compact HTML form factor." Also, i-Mode handsets are "really advanced"; and i-Mode phones can be used in 2.5G networks, which exist today, Lavine says. And Pumatech's Hunt says i-Mode will be ideal for data services because it offers "smaller form factor phones, longer battery life, longer online use, larger data screens, and faster data rates."
...Or Maybe Not
But there's a catch: Rathkind's report says AT&T has been given exclusive U.S. rights to license i-Mode technology. That does not sit well at all with Arshad Masood, CEO of GeePS.com. "As a content provider, I'm willing to provide a Website and a Palm site and a WAP site but if you ask me to maintain another site which is very different from WAP 1.2, that's going to be difficult for me," Masood says. He fears AT&T might institute a control policy which might require content providers like GeePS.com to pay a license fee to be listed on its site or provide their users access to the AT&T site. This will add to his costs.
Not to worry, says Air2Web's Dale Gonzales, because change will be slow in coming. "You don't just get to plunk down i-Mode; you have to retool the network," Gonzales says. "You have to put in the infrastructure and technology and AT&T has to get hold of suppliers willing to build handsets in English." With all that up in the air, Gonzalez says he "just can't imagine that AT&T would be able to make anything happen for another 2-3 years."
Will AT&T succeed in its ambitious plans or not? No one knows; but the only real guarantee of failure is being afraid to try. |
