DoCoMo's New 3G Service Model
DoCoMo's New 3G Service Model

DoCoMo's New 3G Service Model

DoCoMo's New 3G Service Model

On March 24, NTT DoCoMo president Keiji Tachikawa held his routine monthly press briefing and, with what is becoming a regular feature of his recent speeches, pounded the drum once more about the “Paradigm Shift” DoCoMo plans for its services from fiscal 2004 onwards. In a nutshell, this means introducing flat rates for packet data on June 1st, but, “We did not want to open up the window to all customers from day one,” he told reporters. Aided by a flashy Powerpoint presentation, Dr. Tachikawa also announced new anti-spam and anti-virus measures that will be implemented over the next few months.

As we mentioned in last week’s Viewpoint article: For the record, DoCoMo is calling the service Pake-Houdai, which is a real slick piece of marketing. Houdai means “all you want,” or “unlimited,” in Japanese. If you mention the word houdai to most Japanese people, their thoughts will most likely spring to cheerful drinking shops and restaurants that offer nomi-houdai or tabe-houdai (drink all you want or eat all you want) at very reasonable prices.

However, as the press conference video shows, DoCoMo’s move to flat rates has more caveats than a Swiss cheese has holes:

Only for high end users

Only for FOMA

Flat raters will be bumped out of business class and shoved at the back of the plane next to the toilets and stressed mother with two over-tired toddlers… when the network is congested people paying for their packets will get the best out of DoCoMo’s best-effort system, flatters will be shunted down.

On the other hand, and to his credit, Tachikawa did make a very good presentation outlining how near DoCoMo is on the cusp of revolutionizing DoCoMo from a network carrier to an e-commerce platform.

FeliCa transaction revenues just might prove to be the “next i-mode golden egg.” But for the moment, Tachikawa is talking in terms of e-commerce compensating for the loss of ARPU that he envisages.

And we loved the bit about the post-ARPU era coming. We started hammering this point about a year ago and, well, here’s a bit of QED.

Also, Tachikawa seemed to see through his own slightly dissembling rationalization as to why the company is finally and grudgingly going flat rate. The official illusion is that DoCoMo really doesn’t know if its customers want it. Who is kidding whom about this?

While the reality is – again credit to DoCoMo for owning up to this – that:

DoCoMo admitted that it doesn’t have the network capacity to allow more than a limited number of heavy subscribers go flat rate!

DoCoMo can’t go flat rate deeper into its customer base because it needs to maintain the 20-30% ARPU differential between FOMA and PDC to grow new services. Or at least that’s the claim.

This means, we feel, two things: DoCoMo is rushing like mad to get FeliCa going and will do everything now in its power to make e-commerce work so that it can compensate in loss of packet ARPU.

Secondly, of course, the genie is out of the bottle and it’s now only a series of extremely critical decisions about timing for when flat rates go big time throughout all DoCoMo’s subscriber base.

— The Editors.