DoCoMo Plows $343.8 Million into 3.5G HSDPA
Signaling its seriousness to get its HSDPA (high-speed downlink packet access) network and concomitant mobile/smart phones up and transmitting in 2005, NTT DoCoMo said today that it is plowing 37 billion yen ($343.8 million) into 5 Japanese handset and network builders AND Motorola Japan Inc. What is immediately surprising about this move is that once again, as with yesterday’s media extravaganza on the new 900i phones, long-term handset partners Toshiba, and handset maker and major infrastructure builder Sony Ericsson are both missing. But it now looks like DoCoMo feels its time to start really kicking in the efficiencies to differentiate itself from KDDI’s WIN service both in terms of performance and, more critically, to faster recoup the considerable investment the company has made in 3G as it probably gears up for a packet price war with KDDI and Vodafone KK. And then, there is the leveraging of Motorola’s Linux links too!
Coming just a day after the announcement of DoCoMo’s newest Fab 5 900i FOMA phones, DoCoMo has again signaled its going to push the envelope further out, announcing a huge wedge of R&D cash into the super-efficient and strategically cost-saving HSDPA network.
Details on the deal are only being parceled out in superficial dollops to the press at the moment, with DoCoMo declining to comment even on whether Fujitsu, Mitsubishi Electric, Motorola Japan Inc, NEC, Panasonic Mobile Communications and Sharp are going to get the same chunk of heavy change out of the development deal, which commits DoCoMo to get both the 2Mbps download-capable network up, and the mobiles in pockets in mid-2005.
Very impressive. Hold on, did someone say Motorola, the world’s second largest mobile phone maker? Last time we looked, Motorola was not a major vendor of Japanese phones. We haven’t even heard Vodafone K.K.’s Darryl Green singing Moto’s praises either recently. And Motorola JUST managed to shift its long-delayed and, perhaps long-awaited FIRST camera phones last month. That puts Moto near the head of the queue for the also-rans outside Asia.
On the other hand, there is the Linux connection. At his December 5 press briefing, DoCoMo president Keiji Tachikawa said that DoCoMo would let handset makers do their thing with Symbian and Linux for smartphone OS, with the key message being, We’ll take anything but Microsoft.・For Symbian of course, DoCoMo has already got a smart and dedicated handset vendor on board- Fujitsu. Now, with smartphones being the order of the day for 3.5G, its hello Moto, which has just released its first Linux/Java smartphone, the A760 in Asia. Then, as well, Moto is a big oak in the bickering church of UWB too, as well as being known for its ability not to fry a wide variety of chips.
The A760, which is getting rave reviews from the Linux community, integrates MontaVista痴 Linux Consumer Electronics Edition, interconnects through IR, Bluetooth and/or a USB. With a camera, music and video players and a PDA-style personal information manager, it’s loaded with all the goodies that DoCoMo wants to get a hold of for the 3.5G era.
And of course, with Tachikawa’s obvious loathing of monopolies and oligopolies in everything except the Japanese cellular phone market, the inclusion of the Moto package bundled with its Linux/Java OS also acts as an important buffer against Symbian.
But・what about our missing handset providers Sony Ericsson and Toshiba? A quick check with DoCoMo’slovely PR staffer Yuki Isono confirms that these companies, while not locked out of either the 900i or the 3.5G money trough are either behind in development of 900i series technologies, or having issues with it, or have not dedicated themselves to DoCoMo’s plans for 3.5G. When we asked DoCoMo if these were the reasons, DoCoMo said Yes.
Of course one of the other primary reasons for rushing to 3.5G is the money it could save DoCoMo in the medium term as it gears up to push 4G at the end of the decade. Having spent over $1.3 billion on FOMA, DoCoMo wakes up to find that KDDI has about 12 million 3G subscribers via the cheaper to develop Qualcomm cdma upgrade route, then, just as FOMA’s first/fast adopters are pushing voice/data ARPU on FOMA through the $90/ 10,000 yen barrier, KDDI introduces a flat fee for data.
Meanwhile, HSDPA is not only one super fast, but super-efficient network that’s 90 percent cheaper per packet for DoCoMo than its present version of W-CDMA.
A check around Tokyo with people in the know meanwhile confirms our feeling that Takeshi Natsuno, DoCoMo’s i-mode Planning Department Managing Director’s comments yesterday hinting at packet rate cuts for FOMA will be realized sooner rather than later.
“Ever since KDDI introduced the flat rate, it’s been a question of time before DoCoMo has to respond,” says a telecoms analyst here, who can’t give out an official comment because of strict disclosure policies.
While DoCoMo has about 60 percent of Japan’s subscriber base and deep pockets, there is a feeling that KDDI has at least been attempting to throttle the FOMA golden data ARPU goose that DoCoMo had planned for next year. So for the public and investors, the sooner the HSDPA network goes live, and the smarter the phones get, the better.
— Paul Kallender