WW-66

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J@pan Inc presents the Wireless Watch Japan Newsmagazine:
W I R E L E S S W A T C H J A P A N
Commentary on the Business of Wireless in Japan
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Issue No. 66 (Preview)
Monday, August 5, 2002
Tokyo

+++ Noteworthy News
--> DoCoMo ARPU slips 7.5 pct in April-June
--> KDDI to Expand Its 3G Service Areas
--> NTT DoCoMo Expanding FOMA Service Areas
--> J-Phone's New Java Platform Could Be Proprietary

+++ Subscriber Statistics, Corrections, Credits, Administrivia

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Wireless Watch Japan Goes Live
http://www.wirelesswatchjapan.com

Did you know that you're reading the syndicated, low-cal version of
the Wireless Watch Japan Mail Newsmagazine? :-(

We've launched WWJ as a separate media site, and the full version of
the WWJ mail newsletter -- including additional news items and our
famous Viewpoint insider essay -- is now issued Wednesdays from the
(free) WWJ site. We also post our weekly streaming video newsmagazine
on WWJ Mondays at 17:00 JST.

Receive the FREE, high-octane version of WWJ
(and access the lively video version) at:
http://www.wirelesswatchjapan.com/subs.htm

And relax; we will never sell our list to spammers.
======================================================================

+++ Noteworthy News
(Long URLs may break across two lines so copy to your browser.)

--> DoCoMo ARPU slips 7.5 pct in April-June
http://www.forbes.com/newswire/2002/08/02/rtr684741.html
Source: Reuters on Forbes.com, August 2

EXTRACT: NTT DoCoMo said on Friday its 3G average revenue per user
(ARPU) in April-June fell 7.5 percent from the previous quarter to
7,800 yen/month. It was down 25 percent from October-December, the
first quarter after its October 1 launch of the 3G service, which
offers face-to-face communication with video conferencing and fast
Internet connection. In the latest quarter, DoCoMo's 3G
ARPU fell below that of its 2G services (8,150 yen/month) for the
first time.

COMMENTARY: In last week's issue of the full Wireless Watch Japan
email newsmagazine (see link below), we told you about J-Phone's
similar ARPU problems, although a direct comparison is misleading
since J-Phone only operates a 2G system while this report refers to
DoCoMo's FOMA 3G system. Nonetheless, it appears that the past quarter
has not been kind to DoCoMo or J-Phone: both have seen falling ARPUs.
If the J-Phone 2G camera-phone and the DoCoMo 3G videophone bubbles
have burst, then that leaves -- Ta da! -- KDDI sitting in a
terrifically advantageous position. The CDMA carrier has great
handsets (that are some of the cheapest on the market for the value),
Java, BREW (soon), a digital video clip content service, a high-speed
network, and over 1 million 3G users. Hmmmmm. Back in January, we
predicted that 2002 would be "FOMA's year." If J-Phone and Big D don't
pull out of this ARPU dive, WWJ may have to eat humble pie. ;-)

(Receive the FREE full version of the WWJ newsmagazine at:
http://www.wirelesswatchjapan.com/subs.htm)

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--> KDDI to Expand Its 3G Service Areas
http://www.japancorp.net/Article.Asp?Art_ID=3D3414
Source: Japan Corporate News, July 30

EXTRACT: KDDI and Okinawa Cellular announced July 30 that they will
expand their CDMA2000 1x 3G cellular service areas to include 1,231
municipalities in all 47 prefectures across Japan by August 31. The
wireless carriers launched their 3G services in 477 municipalities in
33 prefectures on April 1.

COMMENTARY: Looks like CDMA is kicking W-CDMA butt -- at least in
Japan. Keep in mind two really key advantages that KDDI has over
DoCoMo (because these factors will apply in other markets when the
same network protocols are deployed): First, 3G users on the CDMA
system can access the Net at up to 144 Kbps when in 3G coverage; when
outside, the handsets revert to the older (but still functional)
64-Kbps mode, with no loss of service. Second, CDMA users
get voice coverage nationwide, since the underlying voice network is
essentially the same. With FOMA, if you wander outside of the 3G
service area, **both** the data and voice connections die. The result
is that DoCoMo is racing against the clock to build out the W-CDMA
system, while KDDI is snickering all the way to the bank. KDDI says it
should get 90 percent population coverage in the Kanto (including
Tokyo), Chubu and Kansai (including Osaka) areas, and 85 percent
elsewhere by the end of September.

===============================NOTE==================================
The latest issue of J@pan Inc magazine is now available online!
Click here for the lowdown: http://www.japaninc.com/contents.php?issueID=39

Subscribers can access our hot-off-the-press features, including:

- Two of a Kind -- Man & Ape
Humans and apes have a lot in common, including much of their genome,
but why are Japanese scientists racing to unravel the simian gene?
Sara Harris explains.

- Economic Bondage
Western credit rating agencies say Japan's government is addicted to
debt, but the bureaucrats are fighting back, claiming the ratings are
way out of line. The J@pan Inc editors search for economic truths
amid the mudslinging.

- The Recycling Champs
As recycling laws restrict Japanese tendencies to dump unwanted
goods, more small enterprises are finding ways to profit and prove
that muck = brass.

J@pan Inc: www.japaninc.com
Subscribe at: http://www.japaninc.com/mag/subs.html
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--> NTT DoCoMo Expanding FOMA Service Areas
http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=3Donair/asabt/news/198647
Source: Nikkei AsiaBizTech, July 29

EXTRACT: NTT DoCoMo announced on July 24 that it is expanding the
area for its 3G mobile phone service. As of the end of July, its
service area will cover about 69 percent of Japan's population and
about 93 percent of the population in the Kanto-Koshinetsu region (the
middle part of Japan).

COMMENTARY: Despite the previous news item, it's clear that KDDI (or
J-Phone) can't rely on FOMA running at a coverage disadvantage
forever. DoCoMo has said it will achieve 97 percent population
coverage by the end of 2003. Then, and only then, will we see valid
competition between KDDI's and DoCoMo's 3G networks. As we've said
before, when DoCoMo turns on the marketing and sales juice, and
they've got nationwide voice coverage, things won't be as easy
for KDDI as now.

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--> J-Phone's New Java Platform Could Be Proprietary
http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=3Donair/asabt/news/199504
Source: Nikkei AsiaBizTech, August 2

EXTRACT: The software platform for J-Phone's cellular phones is under
review, and a possibility exists that the company will need to adopt
new specifications that are incompatible with those used in existing
products, according to IT industry sources. If that happens, then much
of the software that developers and handset makers have already spent
time and money on will end up becoming useless.

COMMENTARY: This report goes on to explain that, according to one
industry insider, Vodafone has called several J-Phone engineers to its
offices in Germany to help put together the specs of a basic software
platform for Vodafone's next-gen handsets. That new platform will also
be adopted by J-Phone in Japan for its next-generation phone models.
This report also says that the J-Phone employees participating in the
project are being called "traitors" by their Japan colleagues. Wow!
Looks like this is the first big-money conflict between a successful,
made-in-Japan technology and Vodafone's European technology
development plans. Free advice to Vodafone: J-Phone's J-Sky Java
system is extremely successful, works fine, and competes well with
anything DoCoMo can come up with. Don't mess with success. Now that
you've gone to all the trouble of grabbing Japan Telecom, have the
guts to take a Japan technology success story global.

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+++ Subscriber Statistics, Corrections, Credits, Administrivia

WIRELESS WATCH JAPAN EMAIL NEWSLETTER SUBSCRIBERS
2,710 as of August 5, 2002

STAFF

WWJ video newsmagazine researched, edited and hosted and email
newsletter researched and written by:
Daniel Scuka (daniel@wirelesswatchjapan.com)

WWJ video newsmagazine produced and edited by:
Lawrence Cosh-Ishii (video@wirelesswatchjapan.com)
in cooperation with Video-Link.com, helloNetworkAsia
(www.hellonetwork.co.jp) and IntaDev Inc. (www.intadev.com)

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Text and video copyright (C) 2002 WirelessWatchJapan.com, Daniel
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