DoCoMo delays 3G mobile phone service
Japan's NTT DoCoMo caught the global telecom industry by surprise earlier this month when it announced a four-month delay in its introduction of the world's first commercial third-generation (3G) mobile-phone service.
Ever since the company started a hyped-up promotional campaign for its high-speed, wireless Internet service several months ago, industry players worldwide eagerly anticipated its arrival. They expected DoCoMo's 3G to be just as successful as its i-mode, which offers continuous wireless Internet applications for bank transactions, stock trading and video games to more than 23 million subscribers in Japan and has made the company a world leader in mobile technology.
DoCoMo's original plan to launch its commercial 3G service on May 30 in Tokyo fizzled when the company conceded that it had to fish out software bugs and network glitches as well as readjust the network to meet new revisions in the international 3G communication standard.
Although the postponement of the commercial launch is an embarrassment for Japan's largest telecoms company, the delay was a wise move. And DoCoMo is not alone as other Asian carriers including Japan's third largest mobile operator, J-Phone, and SK Telecom of Korea have put off the launch of their 3G services.
Meanwhile, DoCoMo will conduct a 3G trial run from June to October. During the trial, 4,000 Tokyo-area users will receive free handsets and have their monthly service fees waived in return for providing written feedback prior to the service's commercial introduction on Oct. 1. DoCoMo's 3G test phase will offer users basic i-mode services plus voice and data transmission capabilities as well as video and messaging services.
Some industry analysts, however, predict the delay could slow the introduction of 3G systems worldwide, especially in Europe where uncertainty about the mobile technology still looms. The European markets, which trail Asia in mobile technologies by about a year, enthusiastically await DoCoMo's 3G launch as a test case for continuous high-quality voice and data transmission that's four times as fast as current wireless technology. If DoCoMo succeeds, its 3G service would dismiss the Europeans' lingering doubts about their own future networks and justify the exaggerated prices operators have doled out on operating licenses.
But the European markets won't feel the sting of the DoCoMo delay since their own 3G networks will not be ready for two or more years. Poland's 3G network will not be commercially available until 2004 or 2005 at the earliest. DoCoMo doesn't plan to launch nationwide coverage in Japan until 2004. Yet, with or without DoCoMo's delay, European markets will continue to remain a few steps behind Asia in mobile technologies and experience similar bugs and glitches in their own future networks.
Any 3G delays in Europe, however, will likely arise from problems with obtaining additional funds to construct the next-generation networks, run tests and market services.
Collectively, European operators have already spent about $120 billion on 3G licenses alone, whereas wireless carriers in Japan, Hong Kong and Singapore received their licenses for more reasonable fees. Furthermore, Asian operators will be able to handle the high costs of network build-outs, given their overstuffed corporate coffers.
European telecom operators, already burdened with billions in debt, will ultimately run the risk of having their next-generation projects derailed by angry shareholders when they try to obtain billions more for network rollouts.
