3G debuts as NTT DoCoMo launches public trials

The wait for third-generation (3G) cellular services ended Wednesday in Japan, at least for 4,500 lucky users, as NTT DoCoMo Inc. launched public trials of its W-CDMA-based service.

“Today is a valuable day as we open the first page of the 21st century’s mobile telecommunications,” Keiji Tachikawa, president of NTT DoCoMo told a group of around 80 industry executives who were gathered in the company’s headquarters to witness the launch of services.

The trials, which represent the first time the general public in any country have been able to get their hands on W-CDMA (Wideband Code Division Multiple Access) telephones, are scheduled to last four months after which DoCoMo is planning a full-scale commercial launch. During the trials, users will be asked to pay communications charges but will not have to pay basic monthly fees or pay for the handsets.

Not all 4,500 people will be able to use the service, branded FOMA by the carrier, from Wednesday however. The company has only just begun making terminals, produced by NEC Corp. and Matsushita Communication Industrial Co. Ltd., available to users and DoCoMo announced last Friday that the video cell phone, the highest profile handset of the three available, would not be launched for another month because of continuing technical problems.

Masahiko Inokuchi, executive vice president of major construction company Takenaka Corp., was one of the two monitor users that received their handsets from Tachikawa during the launch ceremony. Scheduled to be on the video cell phone trial, he was in fact handed a gift-wrapped empty box because of the development delay.

Still, Inokuchi said he was looking forward to using the cell phone. He said such telephones could become invaluable for his company because of the importance of communicating images between the various construction and architecture divisions of Takenaka.

Also present at the launch were executives from some of DoCoMo’s foreign business partners.

“While many operators throughout the world have yet to build their 3G networks, NTT DoCoMo has successfully come to the launch of the first 3G service in the world,” said Susan Chow, deputy group managing director of Hong Kong’s Hutchison Whampoa Ltd. “The success today is the result of DoCoMo’s efforts in pioneering development and research in Wideband CDMA technology.”

DoCoMo has been promising a full commercial launch of its 3G network for months leading up to Wednesday and, even as recently as two months ago at the Cebit trade show in Germany, was assuring an increasingly skeptical industry that everything was on track. The delays in network build-out and problems with handset development that had forced other operators to delay their roll-out schedule would not, it said, hit its plans.

In late April, almost a month to the day before its planned launch, the company conceded that it was delaying the launch of a full commercial service for four months. Instead, explained Tachikawa, the company would launch a limited trial service on May 30 with the help of 4,000 volunteers, since increased to 4,500.

He stressed that this trial represents the commercial service DoCoMo has been promising. “History will prove it, May 30 is the launch date of IMT2000,” he said. “This is a commercial service and we will receive money from the users. This is not a fake.”

Tachikawa too stuck to the company’s long-held goal of 150,000 subscribers by the end of the current fiscal year ending March 2002. Achieving that number will depend on a number of things, including getting enough handsets out to the market to satisfy demand. Around 147,000 people applied for the 4,500 places on DoCoMo’s trial service providing an early indication of demand for 3G services.

Some analysts are more bullish than DoCoMo on near-term prospects for the system. Yasumasa Goda, a senior analyst at Merrill Lynch & Co. Inc. in Tokyo predicts the company will have 300,000 users for its 3G service by March 2002. He sees the service overtaking DoCoMo’s second-generation (2G) network in sometime in the fiscal year ending in March 2007, at which time he expects the company will have 36.6 million 3G users and 22.1 million 2G users.

In revenue terms, he expects DoCoMo will take in 26.6 billion yen (US$220 million) this year from 3G services, the majority of which will come from handset sales. By March 2007, he predicts revenue from 3G services will have soared to 5.0 trillion yen while those from 2G services will have fallen to 2.7 trillion yen.

NTT DoCoMo, in Tokyo, can be contacted at http://www.nttdocomo.co.jp/.

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