Moment of Truth Looms for 3G

Since October 2001, when DoCoMo turned on its 3G network, the company’s revenue from data services has risen 27.9 percent, with customers now spending 1,970 yen, or $18.69, a month on average. Data now makes up nearly one-quarter of DoCoMo customers’ monthly bills. But the extra sales did not make up for the decline in revenue from voice calls over that period. As a result, overall spending by DoCoMo customers has fallen 6.9 percent in the past three years.

Despite the talk about persuading customers to send more pictures, video messages and other data by cellphone, in the end the biggest use of the new 3G networks may be plain old voice calls, according to some industry analysts. Carriers are still adding hundreds of thousands of new customers every quarter and their older second-generation spectrum is stretched thin, making 3G an important tool for improving capacity. If data services fail to grow as the carriers hope, the extra spectrum now dedicated to high-speed data networks may end up routing more conversations than photos, music and games. Full Story

Perhaps the most interesting point in this article (something WWJ covered over 2 years ago) is that the move to 3G spectrum was a prudent consideration by the carriers to protect their main source of revenues: voice.

Interview with i-mode Contrarian, Part 1 :: 3 June 2002
http://www.wirelesswatch.jp/modules.php?name=News&file=article&sid=161

– The Editors