Cell Phone Security Slow To Catch On

Back to Contents of Issue: March 2000

by Yaeko Mitsumori

Since launching last February, NTT DoCoMo's i-mode service has acquired more than 3 million users and 240 official content providers -- a success by anyone's standards. Many potential business users, however, have been held back by security fears. So NTTPC Communications (a separate NTT operating company) launched a VPN (virtual private network) service for i-mode last June. How's it been received? Slowly. So far, only 12 corporate customers have signed on. Of course, considering how slowly big companies move in Japan, that could be considered a blazing start.

Noting that the VPN market in general hasn't expanded in Japan, Makio Inui, an analyst at Nikko Salomon Smith Barney, says the market for the service is tiny and won't grow rapidly. NTTPC's goal is 50 customers by the end of this month and 100 by July, says Takashi Endo, executive manager of the company's IP Service Department.

A competing VPN service -- one that works with any mobile service -- was launched by DDI Network Systems last November. So far it's signed on less than 10 clients.

The idea for a more secure wireless network is clearly a good one. Instead of broadcasting data over the Internet, where any hacker worth his salt can gain access to it, VPNs use private lines that are off-limits to the public. In the case of NTTPC's offering, though, the lines are accessible to other i-mode users. (The company suggests site owners use onetime password protection to address this problem.)

Another hurdle NTTPC faces is that its nationwide infrastructure may not be able to handle hordes of corporate customers without help from other NTT operating companies, says Merrill Lynch analyst Kiyohisa Ota. But if NTT Communications, NTT East, and NTT West support the service, he says, it will probably flourish.

NTT DoCoMo plans to launch a Java-based i-mode offering this fall and a W-CDMA service next spring. Endo says NTTPC will upgrade its VPN system accordingly. Then again, what's the rush?

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