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NTT DoCoMo to launch LTE services by end next year
Softbank surprises with vision of complementary role WiFi in mobile web
by Ek Heng, Asia-Pacific Correspondent
Two of Japan’s telcos shared insights into their strategies for the next generation mobile wireless at the recently completed GSMA Mobile Asia Congress in November. NTT DoCoMo announced it was launching Long Term Evolution (LTE) services in Japan without relying on HSPA+ as an interim measure. On the other hand, third largest player, Softbank, revealed it was banking on WiFi to complement LTE to satisfy data intensive uses for next generation mobile networks and devices.
NTT DoCoMo’s president, Ryuhi Yamada told delegates at the congress that Japan’s largest telco was investing JPY300 billion (US$3.4 billion) to launch LTE services by December 2010. The telco is providing datacards initially targeting computer users with mobile phones scheduled for delivery only in 2011. It will initiate coverage in areas of high demand as an overlay to its existing 3G network.
The telco aims turn off its 2G services in 2012. DoCoMo is banking on video services to boost income and it expects the introduction of LTE platform to lead to increased data traffic from current 42 percent to more than 50 percent.
While it was first worldwide to launch 3G WCDMA previously, DoCoMo wll be among early uses of LTE but it will be beaten to the pole position by other telcos with earlier starting date next year.
Softbank grows, CEO sees bigger role for WiFi in the scheme of things
At the mobile congress, Softbank’s CEO Masayoshi Son surprised delegates with his vision of the future foreseeing a role for WiFi to complement mobile networks and devices which he said will not be able to cope with future data-intensive demand.
Touching on the Japanese experience, he said that 50 percent of data traffic happens from home during peak periods which makes it ideal to harness WiFi technology. He added that 3G and 4G is the way to have blanket coverage but WiFi helps provide a richer experience. Saying that mobile, not the computer, will be the mainstay access the Internet, he declared that Softbank would invest aggressively in LTE but we ‘would need both WiFi and mobile’.
Adding personal insights, he said: “I come from the PC and internet business, so I used to use both all the time. After I got an iPhone, a year later my PC/internet usage dropped 95 percent.”
The telco recently introduced eight new ‘mobile WiFi handsets’ and it also owns a fixed broadband network to supply the backhaul to home WiFi customers.
Softbank reported sterling results for its July-September 2009 period with doubling of net profit at JPY43.37 billion (US$481 million) from JPY 21.7 billion (US$230 million) a year ago. It attributed the increased profit to cost cutting as revenue held steady at JPY682 billion (US$10.5 billion) against the figure of JPY 681billion. In the mature Japanese market, Softbank Mobile has been gaining new subscriptions ahead of rivals Emobile, KDDI and DoCoMo.
It is reportedly close to making a bid for Willcom, a local personal handphone system operator with 4.4 million customers. A Yomiuri Shimbun article said that Softbank’s bid is conditional on Willcom’s lenders waiving a portion of debt of JPY93.5 billion (US$1 billion)
Softbank is on a growth path and recently bought additional stake in RockYou, a US application provider for US$50 million. It has 44 percent stake in Yahoo Japan and is on the look out to invest in software and content companies in India and China. Softbank also has 33 percent stake in Alibaba group which is the holding company of business-to-business online platform, Alibaba.com.
DoCoMo’s profit down, Japanese wireless sector urged to look beyond its shores
However, Softbank’s bigger competitor, NTT DoCoMo has been under pressure faced with drop in sales of mobile and call revenues. For its latest quarter ending September 2009, NTT DoCoMo recorded a 38 percent fall in net profit to JPY142.7 billion (US$1.5 billion) against the same period last year’s JPY230.8 billion (US$2.4 billion).
In a recent article last month, the Financial Times interviewed DoCoMo’s Takeshi Natsuno, the strategist behind the highly popular ‘i-mode’ data service, who lamented Japan’s failure to export its innovative wireless technology despite its industry leadership.
Where handset subsidies previously meant that models of advanced devices were almost free to customers, the termination of subsidy in 2007 has led to diminishing sales. At NTT DoCoMo, Natsuno then used the rapidly updated handsets to drive the growth of services such as mobile e-wallets that are still rare outside Japan. With the former business model, the ARPU was higher with each device changed but this revenue model has gone, added the FT article quoting him.
Taking issue with the parochialism of local electronic manufacturers and a lack of English speaking executives, he said that Japanese handset makers may have only two years to expand abroad or risk being left behind in the technology race.
Japan was ahead of other countries with mobile Internet, color screens and cameras but its handset makers have yet to make an impact beyond its shores. Natsuno touched on the prospects for Japanese manufacturers to consider Android phones or set up their handset operations into independent companies, the report added.
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