First commercial 3G service launched in Japan

With more of a whimper than a bang, NTT DoCoMo launched the world's first fully commercial third-generation (3G) mobile service...

With more of a whimper than a bang, NTT DoCoMo launched the world's first fully commercial third-generation (3G) mobile service in Tokyo on 1 October.

The low-profile launch reflects DoCoMo's concerns over the range of content and terminals that the 3G service offers.

Known as Foma, the service is now available in Tokyo and in the nearby city of Yokohama. By December, DoCoMo plans to launch the service in the heavily populated Osaka-Kyoto-Kobe region of west Japan and the central Japanese city of Nagoya. The carrier hopes to extend the service to the rest of Japan from the second quarter of 2002.

Based on the Wideband Code Division Multiple Access (WDMA) system, Foma has a theoretical maximum data transfer speed of 384kbps - 26 times faster than speeds offered by DoCoMo today, and six times faster than rival mobile services.

The high-speed service is packet-based, which means users pay according to the amount of data sent and received.

Foma will also be available for users with PC card data modems.

A second circuit-switched data service offering speeds of 64kbps is also available for DoCoMo's much-hyped mobile videoconferencing service. This circuit-switched service offers a time-based charge, which is slightly more expensive than a regular telephone call.

DoCoMo has signed up 10 companies to manufacture 3G handsets, although only two had products ready for launch on 1 October. Products include the N2001 standard terminal from NEC, and Matsushita's P2101V videophone handset and P2401 PC card data modem terminal.

DoCoMo shipped 20,000 basic terminals and several thousand each of the other two models to retailers for the 1 October launch, according to Keiji Tachikawa, president and chief executive of DoCoMo.

At a DoCoMo shop in central Tokyo, the N2001 standard terminal cost £241; the P2101V carried a £354 price tag, and the P2401 data card was priced at £128. The latest second-generation (2G) i-Mode handsets sold for between £113 and £169 when first launched.

Despite the hefty price tag, Tachikawa believes DoCoMo can meet its goal. "We are confident we can get 150,000 [subscribers] this year," he said. "We expect the standard terminal will sell best, but for corporate users, the data card will be popular."

Telecoms operators around the world are expected to watch the service closely to see if it lives up to expectations, and to find out whether they have a chance of recouping the vast sums of money that many shelled out for 3G licences in 2000.

Since then, 3G services have lost some of their shine as companies begin to baulk at the cost of establishing the new networks and start to re-evaluate whether people need mobile videoconferencing.

DoCoMo has seen its stock price fall by more than a third since the beginning of 2000. But the company, which was an early advocate of 3G, remains confident that the service will succeed.

DoCoMo had planned a May 2001 launch date only to be delayed by a number of high-profile glitches. The glitches proved to DoCoMo that it was not infallible.

A trouble-free launch and successful take-up of the service is vital for DoCoMo, which is starting to see slower growth. "The mobile phone market is growing at a pace faster than we expected, but, unfortunately, i-Mode is not driving the business as much as last year, so the pace of growth has slowed down somewhat," said Tachikawa.

The company is looking to Foma to take up the slack and, if all goes well, lead to an increase in subscriber revenues.

"Foma provides a faster service so naturally we expect that there will be more use than on the conventional 2G service," said Tachikawa.

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