Bandwidth Wars: An End to Japan's Packet Priced Era
Talking to an analyst friend today, we came across the question, how many packets are there in a typical 10-minute video clip encoded for a 3G phone? We asked ourselves this question because, just now, the local press in Japan has caught up with DoCoMo’s plans to roll out HSDPA in late 2004, about a month after WWJ reported on it..!!
To recap, HSDPA technology handles voice and data transmissions on the same spectrum to the tune of up to 14Mbps. And 14Mbps is about the happy Average Japan Joe speed of ADSL. And 24Mbps ADSL from DoCoMo’s big brother NTT costs this author about $30 a month for unlimited access. Which brings us back to packets.
Packet prices on Au (KDDI) have dropped about 60 percent over the last two years, and FOMA 3G packets have dropped about 16 percent to 0.07 yen, on average, in the same period, according to UBS Warburg.
After horror stories of 14-year-olds borrowing daddy’s FOMA and giving him a $2,000 phone bill for what are essentially i-Mode plus alpha kinds of services, it looks like DoCoMo will have to reduce per-packet charges to the sorts of 0.000 decimals that we hated long dividing as children during arithmetic classes. It’s the end of packet pricing as we know it, Jim.
Some hints of new strategies are already emerging with pricing models to cope with the wider still and wider bandwidth. Last week, J-Phone hinted at some of the first steps the company is taking to actually live up to the Global Standard moniker it’s attaching to its W-CDMA 3PP services. To recap, the stalking horse phone (availability outside Japan as yet unknown post-October) is going to be a perhaps- sleek (weight unknown) Sanyo V801SA twin-cam(era), 200-kbyte email attachment capable, tri-band (900, 1800, 1900 MHz) 40-tone terminal that can show 30-second viddie clips. As usual with a J-Phone teaser (we were moderately tickled) the juicy details about new phones and so on will have to wait until Vodafone opens up the info faucet again. Unless you’ve got a bunch of unverifiable rumors, etc. you want to post..?!?
To make such services affordable, Vodafone is already considering an off-peak packet rate so that users can download their comics and other desirables when they are asleep and the network is dormant, according to Darryl Green, speaking at Wireless Japan 2003.
Beyond that, in answer to when Vodafone is going to introduce flat rate services, local J-Phone spokesman Matthew Nicholson answers that “obviously we are looking at different pricing models, and different options, but it’s too early to say at the moment.”
Really!
With J-Phone this October planning to bring the price differential between video telephony and voice from 1.8x to parity, as the contents swell into wheelbarrows of data, the writing is on the wallpaper, and service-based pricing, here we come.
A comparison in your ear: Kirk Boodry, Global Wireless Analyst at Dresdner Kleinwork Wasserstein here sees HSDPA as another step in the “size matters” wars. DoCoMo, he believes, wants to demonstrate the “full potential” of “true” W-CDMA against the Qualcomm route. This fall, KDDI’s will launch 1xEV-DO with an optimal (ha-ha) 2.4Mbps, but DoCoMo intends to strike back with 6X the speed a year later.
More crucially, flat-rate HSDPA may prove to be DoCoMo’s coping strategy for WLAN. With hot spots cooking up in ever more places for the price of card, a keitai plus HSDPA with a flat rate option for certain services might look appealing. Given DoCoMo’s experience in squeezing FOMA’s chips into a competitive handset, building in HSDPA also looks a smoother integration path to super-speed shooting games than soldering in a WLAN solution too.
But what is the full potential of 3G on a keitai? Noting that present contents (apart from movie mail, thanks, J-Phone) are souped-up i-mode era services, what about packet prices for the video/TV phone? WWJ is going to talk to KDDI soonish about KDDI’s plans for mobile phone TVs, but the smart money may be on online gaming. With the latest CG VGA screens from Sharp already showing arcade game quality, knocking the spots of the non-networked Gameboy Advanced (with a real question mark on the “Advanced”) who is going to bet against the possibility of next year’s mobbies turning into a handheld online gamers wet dream. Arcade games, as we pointed out, are already our in our sweaty palms. Who knows, come late 2004, you could be carrying the mobile version of PlayStation 3 in your pants with your joystick.
— Paul Kallander