Report from J-Phone/Vodafone's 3G Launch

Report from J-Phone/Vodafone's 3G LaunchOn December 3, J-Phone Co., Ltd. held a press conference in Tokyo to announce the launch of a new third-generation (3G) wireless network under the “Vodafone Global Standard” service name. “SMS is a form of data roaming and we also have packet roaming” said J-Phone president Darryl E. Green at last week’s 3G launch, adding, “It’s not as rich as it could be, but we’re working on many things.” Watch this exclusive report from the Tokyo event, including one-on-one interviews with Green and CTO John Thompson and highlights of 3G technology demos.

J-Phone Has Great 3G; Too Bad About the Handsets

Overall, I’m underwhelmed. Handset quality and clunkiness versus feature mix are widely considered to be major factors in the fizzling of FOMA to date. I think J-Phone will have to market like heck to convince people these are any better than current (great-quality) 2G models, and if DoCoMo launches better 3G models (as they are expected to do very soon), J-Phone could be in trouble.

Deconstructing 3G Culture

NTT DoCoMo took it square on the chin this week, announcing it would book extraordinary losses of 573 billion yen against its investments in three major foreign partners, KPN, AT&T Wireless, and Hutchison 3G. The company cited the slowdown in the global telecommunications market, and it would be natural to suspect the Sanno Park Tower strategists are back in their corner, applying ice and stitching wounds. Industry watchers, meanwhile, are having a field day. hOWEVER, this week’s write-down represents mere pachinko pocket change for DoCoMo, and, as potentially one of Japan’s (and by extension, the world’s) most profitable companies, the carrier is well on its way to creating something that the Europeans are still trying to sort out: a functioning W-CDMA network.

Japan Carriers' Consumer Focus the Only Focus

I was sitting in the DoCoMo shop in Machida last week waiting to cancel my second PHS data card (which we rarely use since we got a home WLAN), when it suddenly occurred to me: there’s no enterprise wireless data market in Japan because the carriers — yes, the **carriers** — don’t want one. NTT DoCoMo announced that consolidated revenues from “packet communications services” (read: i-mode) reached 715,600 million yen, up **102 percent** from the year before. Clearly, revenues from wireless data are booming, and if the corporate market has not yet been tapped, just think of the riches that will flow to the likes of DoCoMo, J-Phone, and KDDI when it is.

J-Phone Tells All! Well… a Whole Bunch, Anyway…

For the past several weeks, WWJ has been emailing J-Phone to set up an interview for our video newsmagazine. We finally settled on a date, and they asked us to submit our outline questions. J-Phone PR’s Matthew Nicholson responded to some of these earlier this week, and herewith we present a summary of his comments, wherein J-Phone reveals (almost all) about brand image, “plastic” roaming, and handling spam mail.

Handset Heaven; An exclusive look at i-mode's Club D

Handset Heaven; An exclusive look at i-mode's Club DThis week, Wireless Watch Japan ( WWJ ) was invited by NTT DoCoMo to visit their Club D Showroom, located on the 29th floor of corporate HQ in Tokyo. We do the intro from the FOMA F1 — that’s the race car that can communicate at 384 Kbps on a test track using FOMA, we play with 504i Java and 251i i-shot handsets and tried videoconferencing with the new 3G PDA by Sharp. This programme is pure eye-candy, and is not-to-be missed for the serious 3G wireless aficionado. Boy-o-boy-o-boy… it doesn’t get much better than this folks! After buying a soda via c-mode, we ask, “Why does DoCoMo spend so big to promote its technology?”

Paying Heavy 2G Users to Stay Happy Just a Little Longer

But the most significant hidden news in this announcement may just be the fact that there are 300,000-plus extremely heavy data users already using i-mode. This means that DoCoMo has a captive, willing audience already on hook that is ripe for targeted migration to 3G. And it would appear that this audience has been woefully underexploited — FOMA had just 127,400 users on July 31. Looks like Big D will slash i-mode transmission fees on both the 2G and 3G networks starting September 1.. OK — maybe the reduction isn’t exactly a “slash,” since the 2G rate will only go from 0.3 yen per packet (128 bytes) to 0.2 yen per packet, and this reduction will only be applied after the first 100,000 packets (i.e. the first 30,000 yen of transmission fees).

Why is J-Phone hurting so bad?

The drop in ARPU could be related to the fact that both DoCoMo and KDDI now have camera-equipped keitais on the market (although DoCoMo’s isn’t Java-enabled). Are we seeing the end of the camera-phone bubble? If so, there’s little else on the horizon to serve as the next market booster — except, of course, 3G speed-optimized services (and KDDI’s got the better network right now).

DoCoMo's Hidden 9 Percent

Neale contacted DoCoMo IR, who helped clarify where the 9 percent lives in DoCoMo accounts. In the English version of the Consolidated Financial Statements (8 May 2002), under “(2) Consolidated Statements of Income” (page 16), there’s a section titled, “Operating income from other businesses.” This includes the 9 percent (Aha!!), and amounted to 45,272 million yen in FY2002.