WW-100 -- Straight from EXPO COMM WIRELESS JAPAN 2003, July 16-18 at Tokyo Big Sight

J@pan Inc presents the Wireless Watch Japan Newsletter:


Commentary on the Business of Wireless in Japan

Wireless Watch Japan Newsletter
Commentary on the Business of Wireless in Japan
Issue No. 100!, Tokyo, Tuesday, July 22, 2003

(** Ed's note: This is the 100th issue of the re-launched WIRELESS
WATCH JAPAN, the only totally free email newsletter covering Japan's
promethean wireless industries and issuing directly from the alleys
of the archipelago. We're delighted to have you with us and we extend
a warm welcome.)

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++ Viewpoint: Straight from EXPO COMM WIRELESS JAPAN 2003, July 16-18
at Tokyo Big Sight

++ Noteworthy News:
-- KDDI's "au" Leads in 3G but Lags in Profit
-- Wireless Bag Tags

============================= EVENT ==================================
G-MAC's "BPM/BPO Forum 2003"
Date: July 23rd
Location: Aoyama Diamond Hall (Tokyo), Japan.

This one-day forum provides a better understanding of BPM/BPO with
its concentrated agenda. Invited guest speakers will give their
domestic & global outlook on BPM/BPO initiatives.

Also, leading solution providers will be presenting free Workshop
sessions presenting products & services in designing and implementing
a BPM/BPO strategy.
Tel 81-3-5805-6070, email: info@gmacjapan.com www.gmacjapan.com

++ Viewpoint: EXPO COMM WIRELESS JAPAN 2003 - July 16-18, Odaiba, Tokyo

Last week we popped out to Odaiba, the sleek artificial island in
Tokyo bay, to join EXPO COMM WIRELESS JAPAN 2003, the nation's largest
and most extensive wireless communications and technologies trade show.
The massive booths of NTT DoCoMo, KDDI and Vodafone, with their vivacious
and very sexy campaign girls, drew heaps of attention, of course.
But there wasn't really much hard news from the three mega-carriers.
Fuji Photo Film demonstrated its new wireless consumer product and service
lineup, and the handset makers showed off their striking new models --
which were almost as sleek and sexy as the campaign girls. Almost.

The focus of the annual exhibition is gradually shifting towards
enterprise solutions. Big foreign players like Nokia and Ericsson were
missing in action. In fact, organizers this year were only able to
fill two halls with exhibitors.

Ironically, one of the few companies in the spotlight was the troubled
TEPCO (Tokyo Electric Power Company), though NOT for the feared summer
blackouts in Tokyo (see JI story link below), which may have been
just a wolf-cry of political pandering after all. TEPCO instead announced
a broadband trial in which the final mile is bridged through the use of
FWA (Fixed Wireless Access) technology.

Over the past decade TEPCO has installed fiber optic cables along its
electricity network. By installing base stations on the electricity poles,
TEPCO is able to reach every household or company over the air by FWA.
This is a major advantage over FTTH (Fiber To The Home), for which a
physical connection to the premises is required. Installing FTTH
requires lengthy and often complicated negotiations between the cable
company and the landlord, frequently delaying the roll-out of the
crucial last mile.

But for FWA, the customer's setup is as simple as it is for ADSL: A hub
or computer must be connected to a small box provided by TEPCO that
includes the antenna. With FWA, it is also possible to use IP telephony.

TEPCO piloted FWA using the 2.4GHz band, which does not require a license,
and past results were promising. But the limitations of this technology
fast became clear. Theoretically, it is possible to achieve speeds of
11Mbps. But necessary noise suppression technologies reduced the effective
bandwidth of the channels, making it difficult to compete with ADSL.

TEPCO then decided to explore the 5GHz band with maximum speeds of 54Mbps.
With these speeds it is possible to provide broadband access to dozens of
households with just one base station. This will also allow TEPCO to become
a bandwidth capacity wholesaler to ISPs. In cases where the available band-
width is insufficient, heavy users can choose the FTTH service from TEPCO.

The remaining problems for TEPCO to overcome are the lack of available
channels in the 5GHz band -- and the government's restrictive policy
against allowing TEPCO different methods of connecting the access network
to the backbone. TEPCO starts trials this month (July). Commercial service
will begin later this year.

Commentary: TEPCO's target customers are households and small companies. If
TEPCO tackles its remaining problems in the coming months, its FWA services
will make it competitive with ADSL providers. This could be a major blow
to NTT. The giant telco, which has been running FWA trials as well, will
probably try to initiate services similar to TEPCO's.

The economics and marketing strategy behind TEPCO's plans remain
unclear at the moment. TEPCO's main investments will be in base stations.
Unlike Yahoo BB, the rapidly expanding ADSL service provider, TEPCO does
not have to spend chunks of money on customer acquisition.

We think their smartest move would be to sell the service as a package-deal
with their utility services. But we can't be certain the Japanese authorities
will allow this, and it might put even more pressure on TEPCO's already
strained relationship with the government. Domestic customers will
eventually benefit from lower prices and superior service. The only
question is when.

-- Arjen van Blokland

"TEPCO's Blackout Bluster," from J@pan Inc, July 2003


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(Long URLs may break across two lines, so copy to your browser.)

** KDDI's "au" Leads in 3G but Lags in Profit

In Brief: Despite a 72 percent spike in its pretax profits this
year and a massive lead in 3G subscribers (8.6 million to DoCoMo's
560,000), KDDI's overall profitability still falls short of rivals
DoCoMo and J-Phone. Expect a launch of its EV-DO service
(boasting data throughput of 600 Kbps) this fall.

Commentary: As we noted last week, global-leader Vodafone's brilliant
and internationalist approach to its J-Phone partnership platform is
putting intense pressure on a nearly saturated market. An estimated
64 percent of Japanese own cellphone or PHS services. Not only
advanced services, but brilliant marketing (such as Vodafone/J-Phone's
currently ubiquitous ad campaign) will be necessary to get those
users to switch.



** Wireless Bag Tags

In Brief: The consortium of Japanese firms behind RFID (radio frequency
identification) will get a test run of its technology in New York, Amsterdam
and Singapore later this year. Theoretically, your bags could get tagged,
collected, delivered and secured on your flight -- without you having to
touch them after you've packed.

Commentary: Especially for cities with faraway airports like Tokyo and New
York, this sounds promising. But it might also be a boon to aiport security
experts. A US Federal agent in New York earlier this year recited for us
a litany of basic luggage security breaches that no airport in the world can
now prevent -- until we politely asked him to stop. We had to fly out the
next day.


SUBSCRIBERS: 3,982 as of July 22, 2003

Written by Arjen van Blokland and Roland Kelts;
edited by Roland Kelts (editors@japaninc.com)


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