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To: Gregg Powers who wrote (19497)	12/10/1998 2:16:00 PM
From: Ruffian	Respond to of 152472

DO CO MO> oCoMo chief foresees quick move to 3G cellular services By Anthony Cataldo EE Times (12/10/98, 6:49 a.m. EDT) TOKYO — Speaking at a recent gathering of the Foreign Correspondents' Club of Japan, DoCoMo president Keiji Tachikawa said the company is seeking to diversify its services, expand coverage areas and reduce the number of subscribers changing to different carriers as part of its "Phase Two" growth strategy. One of the key steps will be a quick move to the third-generation (3G) cellular phone standard, which will integrate voice, data and images. NTT DoCoMo is Japan's largest mobile telecommunications operator. 3G specs are now being hammered out by the International Telecommunications Union. Tachikawa said the standardization process should be completed in December of 1999, but DoCoMo is already conducting test trials at its Yokosuka Research Park near Tokyo in conjunction with Ericsson, Nokia and Lucent Technologies. He said thecompany plans to start a second field trial in metropolitan Tokyo early next year, and expects to start offering full 3G services in Japan by spring 2001. "We'd like to start ordering equipment by the early part of the year 2000 and start services after that," he said. "Depending on demand we'd like to expand nationally." There have been factional disagreements over the wideband code-division multiple access (W-CDMA) standards among wireless operators in Japan, Europe, the United States and Korea. DoCoMo too has been promoting its own third-generation phone scheme outside of Japan, and recently signed an information-exchange agreement with Hong Kong's SmarTone on 3G. Tachikawa said these different standards will not deter its plan to deploy 3G cellular services. "The understanding is that there are three proposals that will satisfy international requirements for the system," he said. "It seems that as far as the ITU is concerned, they're not trying to have one standard. For us, it would be all right if all three become standards." However, he said it was "unfortunate" that Ericsson and Qualcomm have written "blocking letters" to the ITU asserting their intellectual-property rights over CDMA technology. "I hear discussions are under way within the ITU to cope with the situation, but it will require more time until we reach a conclusion," he said. DoCoMo is reaching the point of diminishing returns for existing services, and therefore has a lot riding on getting an early start on 3G cellular. The company has 21 million wireless subscribers in Japan, giving it a 57 percent market share and making it the world's largest wireless telecom carrier. Growth in cellular phone services continues to climb at a healthy rate, though its pager and Personal Handy Phone (PHS) business has been declining in recent years. Meanwhile, the company is coming under scrutiny as it seeks to devise new ways to bring in more subscribers. After DoCoMo recently announced it would take over PHS services from NTT, a rival carrier complained to the Ministry of Posts and Telecommunications about DoCoMo offering incentives to customers who subscribe to both its PHS and Personal Digital Cellular services, claiming that the tactic is anti-competitive. Tachikawa, however, said DoCoMo considers the services complementary. The company is also worried about how much more it can grow when it already has such a large customer base. The NTT spin-off went public this October in a highly successful IPO, in spite of the turmoil in Japan's securities markets. It has posted phenomenal growth in recent years, with sales revenue growing 122 percent and 64 percent in 1997 and 1998, respectively. But Tachikawa said the company can't be expected to grow at such a rapid clip in the future, and will likely rise a more moderate 30 percent in 1999. "In order to cope with the growth rate, we need to diversify services and provide better after-care to existing customers. And by doing so, we hope to reduce the churn rate," he said. Part of that strategy includes reviving its moribund non-cellular phone. Pager subscriptions will likely slip from 5.8 million in 1997 to an estimated 2.7 million in 1999. But the company hopes to counteract that trend by introducing a "members mail" service for high-end users, he said. Tachikawa has more grandiose plans for PHS. This low-cost service had spectacular growth only a few years ago but has fallen out of favor as cellular service prices have come down and amid complaints about limited coverage areas and transmission dropouts. Even so, he envisions PHS as a low-cost communication terminal used not only as an alternative to cellular, but as a wireless medium attached to automobiles, bicycles, motorcycles, vending machines and even household pets. He also sees it being used for 9.6-, 28.8- and 64-kbit circuit- and packet-switched Internet access for portable PCs and PDAs. "I really believe in the near future you will see these services surround you," he said.

To: Gregg Powers who wrote (19497)	12/10/1998 2:36:00 PM
From: Clarksterh	Read Replies (3) \| Respond to of 152472

Gregg - I agree that our disagreement is largely one of emphasis, but I would pose the question for the sake of argument - why would Ericsson 'compromise' in such a way that they know that the people holding them out of 3g contention will not accept it? They know, essentially for certain, that Qualcomm will not accept the new chip rate. Thus this buys them nothing with the ITU since Qualcomm's letter to the ITU will still be in place, and the ITU isn't going to care what Ericsson does as long as that letter from Qualcomm remains in place (and somewhat obviously the 'compromise' has no bearing on the technical validity of the IPR being claimed by Qualcomm.). If they didn't make the move for ITU reasons, they must have been forced to this move for other reasons, and I suspect technical ones. You say that they must have known about the chip rate problem for a while, but it wouldn't surprise me if they didn't. This is, after all, just about the most basic issue in communications - out-of-band power and linearity issues - and yet they proposed it in the original spec. If they were stupid enough to propose it in the original, it is quite conceivable that they have only just conceded to themselves that it isn't doable. As an engineer I've seen this kind of thing happen frequently - the engineers on a project say that the spec is completely unrealistic, but management doesn't concede until they start to look foolish (as Ericsson was with the independent papers being published). I don't expect us to reach agreement on this, but I thought y'all might be interested in my reasoning. Clark PS I might agree with you more that this was a sign of Ericsson's legal weakness if they really did concede on something, no matter how minor. But this 'compromise' is that in name only and Ericsson undoubtedly knows it. PPS FYI I don't think I ever said, even by accident, that the IPR issue was a minor one (I checked my posts to be sure). The only claim I made is that Ericsson and Qualcomm have equal IPR power in the ITU 'court', but not in the real courts.