Third Generation Mobile:
Three Groups for 3G
- by Yaeko Mitsumori -
Early in March, a new firm began implementing plans for third generation (3G) mobile telecommunications in Japan. The new company - IMT-2000 Planning - was established at the end of 1998 as a joint enterprise between Japan Telecom, Nissan Motor, and Air Touch International. IMT-2000 Planning aims at no less than the full implementation of the next-generation 3G mobile telecom protocol, IMT-2000 - due for ITU approval later this year, promising to bring digital multimedia to every coat pocket.
NTT still on top NTT DoCoMo - the NTT Mobile Communications Network Group - is, of course, the dominant player in Japan, with 22.3 million users as of December 1998 - about 57% of the 39 million domestic cellular subscribers. DoCoMo is also the leading proponent of Wideband CDMA (W-CDMA), which was submitted to the ITU as the Japanese proposal for IMT-2000 implementation by the Association of Radio Industries and Business (ARIB) - the relevant standardization organization in Japan - last June. For the past decade, DoCoMo has promoted study of W-CDMA and has been vigorous in IMT-2000 standardization efforts at the ITU. Keiji Tachikawa, DoCoMo President, has repeated that the company will launch its W-CDMA services at the beginning of 2001. If this happens on schedule, NTT DoCoMo will become the first carrier in the world to launch IMT-2000 services. (See: NTT DoCoMo's IMT-2000: The Next World Standard for Mobile Communications?, Nov. 97, and: NTT DoCoMo touts W-CDMA for next generation mobile telecom, Aug. 98 -Ed.) Competition springing up Other players, however, have not been idle. IDO Corp. and the DDI Group entered the Japanese cellular market after the 1987 partial deregulation. The MPT's strategy then was to suppress competition against NTT, and these firms were obligated to limit their business to certain areas; IDO was allocated the Kanto (Tokyo Metropolitan) area and Chubu regions, while DDI was allocated the rest of Japan. Based on this geographic split, these two firms have been cooperating to provide certain services, including subscriber roaming. The IDO-DDI relationship further deepened when they decided to launch nationwide cdmaOne services, based on IS-95 technology developed by Qualcomm in the US. CdmaOne (based on the N-CDMA standard) can provide higher sound quality, stable connectivity, and faster data transmission speeds. Phones implementing cdmaOne can handle data at 14.4Kbps, and this will increase to 64Kbps - the international ISDN single-channel standard - by autumn 1999. DDI launched cdmaOne services in western Japan (Kansai, Kyushu and Okinawa regions) in July 1998 - and nationwide cdmaOne services will kick-off this month when IDO launches services in Kanto and Chubu. Concurrently, DDI will expand its service to the rest of Japan, and the total number of users is expected to rise. Multimedia 3G But what is so exciting about 3G mobile communications? Unlike present standard PDC (personal digital cellular) and cdmaOne cellular services, the futuristic 3G systems will be able to provide high-speed data transmission at up to 2Mbps. In other words, with a 3G terminal - which are expected to be almost the same weight and size as the current crop of mobile phones - customers will be able to receive voice calls, faxes, and digital data in many forms - including video, audio, and text. This contrasts starkly with the 9.6Kbps data speed achieved by current PDC telephones, and is still much higher than cdmaOne's 64Kbps. The three other groups - Digital Phone, Digital Tu-Ka, and Tu-Ka Phone - entered the market in 1991 when the MPT allocated new frequencies in the 1.5GHz spectrum. Ownership of these three groups and their subsidiaries is a complicated web of cross-holdings involving JT, Nissan, and DDI. For this reason, the new IMT-2000 Planning company will work exclusively on achieving 3G - meaning W-CDMA - services, said Kozo Suzuki, JT's senior managing director. But he suggested the new firm will fully utilize the existing network of second generation (PDC) services. "With the 3G business, we expect to get 3 million subscribers within two years," and he expects 3G services to generate $100 billion annually worldwide by 2005, with at least 100 million users. KDD marriage-minded Other carriers - like KDD Corp. - are also eager to enter the 3G business. KDD, once Japan's international telephone monopoly, has been providing seamless domestic and international services since its merger with Teleway in December 1998. At the press conference announcing the merger, Tadashi Nishimoto, KDD President, said that the firm would like to provide 3G services "in cooperation with IDO." Since, however, the number of 3G slots is limited to three by the MPT, all of which are firmly occupied by the current operator groups (DoCoMo, IDO-DDI and the JT/Nissan Group), KDD seems to have no choice but to enter business by partnering with one of these three. The problem facing KDD is: which one? The first possibility is the IDO-DDI group. Last May, IDO - working with its present cdmaOne partner, DDI - launched a joint CDMA 2000 development effort based on IS-95, with the firms establishing a laboratory within DDI headquarters in Tokyo. Further, JT and Nissan launched field tests for W-CDMA even before establishing IMT-2000 Planning. Both firms will contribute the fruits of their studies to the new firm. The last MPT license holder, DoCoMo, launched field tests for W-CDMA in October 1998 at the Yokosuka Research Park and other research locations, and in February of this year, the mobile giant initiated a 2-year W-CDMA experiment in Singapore in cooperation with Singapore Telecom. A corresponding effort will be launched in Malaysia later this year. Industry watchers will be following KDD closely to see which group receives the marriage proposal. Worldwide schedule slips IMT-2000 Planning is scheduled to change its status into a "business" company this summer, and apply for its 3G license in the fall. But the schedule might be delayed. The original MPT licensing and implementation schedule was set based on the ITU schedule. ITU Task Group 8-1 (TG 8-1) was scheduled to decide key IMT-2000 characteristics by the end of March 1999, and based on these, the MPT was to have worked out the "technology conditions" for IMT-2000 in Japan. The MPT is determined to approve only those proposals recommended by the ITU. After obtaining revision of related laws, the MPT intended to start accepting applications for 3G business around November of 1999, with the licensees putting in base stations and terminals over the following 18 months. Yasuo Tawara, MPT Deputy Director for Mobile Telecom, said that licensed carriers may be able to launch IMT-2000 services in 2001, "if everything is carried out on schedule." Further, there is pressure from the carriers, with DoCoMo's Tachikawa stating that DoCoMo "has to" launch IMT-2000 services at the beginning of 2001, because the firm's already-allocated spectrum will be filled up by that time. However, the ITU standardization process for IMT-2000 has been deadlocked due to problems with intellectual property (IP) rights. Two companies - Qualcomm and Ericsson, respective proponents of the differing North American and European IMT-2000 standards - have claimed exclusive patent rights for technology which is vital for CDMA-based systems. A TG-81 subcommittee (Working Group 5) has become mired in the dispute, and its February meeting in Malaysia produced no more than a listing of names and general definitions of the key IMT-2000 characteristics - the characteristics the MPT is waiting for. Although the next WG meeting scheduled for Brazil in mid-March is supposed to produce a firm decision on the contents of the key characteristics, progress is not certain. Japanese players speak out Back home, Japanese carriers have not been sitting idly by, and have been keenly promoting their own efforts to achieve harmonization. Since the early 1990s, DoCoMo has geared up its effort to make its W-CDMA technology the international standard for 3G, which is partly why the present PDC system - developed by NTT - is the sole technology used in Japan. (With the result that no Japanese cellular user can use their phone outside Japan.) Last December, taking a leadership position amongst the world's 11 major carriers, DoCoMo released a statement saying that IP issues should be resolved between stakeholders independently of the ITU standardization process, a position mirrored by DoCoMo's president at a press conference held that month at Tokyo's Foreign Correspondent's Club (FCCJ). International standardization organizations are also actively seeking a solution. Early in February, ARIB staff met with officials from TIA, a US standards organization, and asked four major carrier/vendors - DoCoMo, Nokia, Ericsson, and Qualcomm - to show initiative in solving the outstanding issues by April. ARIB has also been meeting frequently with ETSI, the European standardization organization, seeking a consensus in a variety of areas. ARIB director Akio Sasaki said that Japan would like to play a mediator role in solving the stagnant issues. But Sasaki is quite pessimistic about Japan's chances of having its 3G proposal accepted as the sole international standard from among the competing players. "Gaps (among them) are too wide," he said. DoCoMo's Tachikawa at the FCCJ also said that the ITU seems to have already given up on its harmonization efforts. However, Fumio Watanabe, Vice President of the Mobile Communications Laboratory of KDD - a key member of ARIB - said he still believes the ITU will be able to work out a single international standard. "Gaps among proposals have been narrowed down," he said, and "there are only three major differences among the major proposals: chip rate, synchronization or asynchronization of base stations, and the pilot issue." The ITU view Impetus - if somewhat muted - for achieving a worldwide single standard also comes from the ITU's new secretary-general, Yoshio Utsumi, who said that a single standard is desirable for both makers and users, although it is not for the ITU Secretariat to decide the matter. "Participating nations rather than the Secretariat should decide how to deal with the issue," he said. Content is key Many agree, however, that success for the 3G business depends on the digital content. JT's Suzuki said that carriers and vendors are now rushing to promote 3G technology but they are still trying to determine what kind of services can best be provided via 3G. "Even if we construct networks and terminals, expending much money, it will be useless if nobody uses them," he said. Having already joined battle over IMT-2000 technology, market players NTT DoCoMo and the IDO-DDI alliance will further clash over the provision of content. In late February, NTT DoCoMo fired the first shots by launching a new Internet access service called i-mode. Using a cellular terminal (phone) specially designed for the service, subscribers can access Internet websites, transfer money to a bank account, or purchase airline or movie tickets. Keiichi Enoki, General Manager of NTT DoCoMo's Gateway Dept., said that the company is expecting 10 million subscribers for the service within three years, and i-mode will become the standardized 3G service offering from DoCoMo. On the other hand, IDO and DDI will in April launch mobile Internet services based on the Wireless Application Protocol (WAP), using cdmaOne terminals. WAP is based on the Wireless Markup Language, whereas i-mode relies on compact HTML, a subset of HTML - the current WWW standard for viewing text. Like i-mode, WAP will provide a wide variety of services, including e-mail, news headlines, stock reports, map directions, and sports score. JT is also planing to launch WAP services, using current generation PDC terminals, and - hedging its bets - DoCoMo is also developing WAP services. It remains unclear as to which standard will ultimately win out, but if the conflicting demands of IMT-2000 standardization proponents - carriers, standardization bodies, and vendors - can be resolved, the ultimate winner should be the customer.
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