The news is out that KDDI has decided to adopt Sony’s FeliCa, thus removing a major barrier to the contact less IC card’s promulgation outside of DoCoMo in Japan– and also bringing the technology into a major cdma carrier. For us at WWJ, this is the biggest news of the month! Last week we talked to Shusaku Maruko, Senior Manager of Sony’s FeliCa Business Center and got the lowdown on what FeliCa will be. Please wait for that program, and before that, we will post the only FeliCA i-mode service video available for you, our loyal subscribers, around in the world on or around December 17. Sorry to hype this, but you just can’t get our action anywhere else in the world and, Goddam, we are so happy!
In our interview with Maruko san, we found out that Sony/ DoCoMo have signed up to 20 partners for the service, including all the sorts of right people you can think of. This, building on the tested consumer base of 30 million people in three countries that Sony’s robust (i.e. it works and it’s dead good) contactless IC technology, was great for the prospects of turning the mobile phone into the ultimate e-wallet device. But the fact that KDDI has signed on gives the system an enormous amount of credibility and, potentially at least, another 17 million subscriber base. Talk about plus Alpha, or was that Kappa?!
We don’t know yet what sort of option KDDI are taking, though. For example, at some point in the next year or so the mobile FeliCa chip that will have been specially rigged for keitai will become a standard feature, with subcribers chosing what services they want by downloading appliations onto the FeliCa platform. (For more details about this, please see our upcoming video program with Sony).
One on level, DoCoMo seems to be at war with KDDI. No, not like normal– like almost personal. For example, in his last press briefing of the year, DoCoMo’s Tachikawa took a couple of heavy swings at KDDI. Firstly he complained that KDDI had vacated its 2G spectrum in bumping (forcing) KDDI subbies onto 1x and left its 2G spectrum fallow. Now, we all know one of the subsidiary (major) reasons for DoCoMo’s shift to its particular W-CDMA standard was lack of spectrum. If you keep on having to dial three times to get connected and then one out of three calls on your PDC gets dropped, which was the real situation for the author in the late 90s, well, the move to new spectrum looks like a no-brainer. Whose got a bunch of spectrum fallow? Tachikawa basically asked KDDI to give it back, pointing out that W-CDMA base stations can get 1.5x range on 800MHz.
The second pot shot was at flat rates. It is apparent that DoCoMo doesn’t want to get into a price war. We at WWJ belive that KDDI has pulled a bit of a fast one with the 4,200 yen flat rate, because there is no way that Big K’s subbies are using that amount of data, and, if you look at our recent Viewpoint, you’d see it’s a good way for KDDI to make $15 a month free, basically. Happy Packet by Vodafone could, we feel, seriously damage Vodafone K.K.’s 2H bottom line. Tachikawa last week said, basically, Packet Price War? Get Stuffed!
And of course, given DoCoMo’s 40 million plus alpha (plus FOMA!) subsciber base, he can afford to. In a recent analyst interview, we heard the comment, DoCoMo subscribers are really starting to complain about the costs. But they are still calling and they are still downloading. WWJ wants a packet pricing war because we can only claim 50 percent of our keitai bills for business purposes tax, and about $100 a month is the limit for the author.
For DoCoMo, more than being a zero-sum game, they can just sit back because of market dominance for now. But there was no disguising the distaste, the sour note from Tachikawa speaking about KDDI’s flat packet rate last week.
The news is that KDDI will incorporate the ability to use a FeliCa card in its phones. We wonder. What about getting a chip inside the old cellular block?
The obvious distaste of KDDI for DoCoMo aside, KDDI’s adoption the the contactless card technology, despit the the fact that it long ago chose the Qualcomm route, is a HUGE win for FeliCa.
Like DoCoMo, KDDI has been messing around with payment systems, notably the Kei-credit settlement system. But the fact that Sony and DoCoMo are building FeliCa as an open architecture, and that Big D has 60 percent of the domestic cell phone subscription market, AND that, from next August, it looks like all PDC as well as FOMA phones are going to be FeliCa mobile-chipped, seem to have made for a compelling argument for KDDI.
KDDI has now also given a bit more of the game away, saying that it will eventually incorporate the credit card functions of JCB, a major credit card here, and three other companies, as well as electronic money functions. Because the cards will be removable, cell phone users will be able to continue using them even after changing their handsets.
Now, what about Vodafone K.K. Mmm, we thinks either they are on it, or minds and paperwork are far, far away in distant London. We’d be so happy for Vodafone to live up to it promise to take the best in Japan and apply it to the world. We loved the whole JAVA appli/ i-mode revolution, in fact, these sort of crackerjack breakthroughs– the kind of thing Japan has a genius for– were what got WWJ founded in the first place.
While Nokia etc. struggle with VGA deployment and hope for 5 million camera-enabled phone sales over Christmas, look East! Boy, it’s good to be in Japan when even KDDI and DoCoMo can bury the handset in a move that’s the next best thing since mobiles moved to digital!
– Paul Kallender.