WW-145 -- Wireless Hotspots? Tokyo's First Wireless Blanket Services Announced

J@pan Inc presents the Wireless Watch Newsletter:


Commentary on Japan's Wireless World

Wireless Watch Newsletter
Issue No. 145
Friday August 5, 2005

++ Viewpoint: Wireless Hotspots? Tokyo's First Wireless Blanket Services Announced
1. Livedoor's Trial Blanket Coverage
2. Customers Will Benefit, But Will Providers Profit in the Long Term?

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++ Viewpoint: Wireless Hotspots? Tokyo's First Wireless Blanket Services Announced
1. Livedoor's Trial Blanket Coverage

Densely populated Greater Tokyo is evolving as an interesting
battleground for wireless hotspot providers. NTT and Yahoo
are the leading companies in wired broadband. NTT offers
the Musen LAN service 24- hour broadband access for 3 dollars.
The service is available at most Tokyo rail stations. Other
NTT services are available at hotels and cafes for 7 dollars
per month. Yahoo BB mobile offers its wireless LAN service
in railway stations and neighboring cafes and fast food restaurants.

Though these services are reasonably priced, the number of
hot spots is still limited. A new Livedoor initiative could
change this. Livedoor's president and CEO, Takafumi Horie,
well-known for his attempted hostile takeover of Fuji TV,
announced a wireless hotspot service with full coverage within
JR's Yamanote Line, the elevated railway that circles central
Tokyo. Later this summer trial services will start in Shinjuku
and Minato wards. ‘Wireless Hot Blanket’ might be a better
description for this type of service. Livedoor is not only targeting
notebook and PDA users, but also access services through
IP phones and IP-enabled cameras. Livedoor has tied up with
fixed network provider Powered Com to get access to its
IP-backbone in Tokyo.
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2. Customers Will Benefit, But Will Providers Profit in the Long Term?

Although blanket coverage seems appealing, we have a couple of
questions. Are there handover coverage areas while we are on the
move? And will we be able to use the service while seated on the
couch in our home in Ueno? How high a bandwidth will we get in
areas with many concurrent users?

A company that might be affected by the rise of hotspots is
Willcom. Its unlimited data services for a fixed amount offer
much lower bandwidths than wireless hotspots. Current service
fees for hot spots are cheaper than Willcom's 'all you can eat'
tariffs. But coverage is still superior to wireless LAN services.

As is the case with residential broadband services, the intense
competition between large providers will benefit customers.
Differentiation will be accomplished through lower service charges
and better coverage. We expect other companies to follow Livedoor
if its trial services in Shinjuku and Minato wards are successful.
Emerging technologies like WiMax might also be introduced soon.
With all these different providers and wireless access technologies,
one might wonder if there exists a long-term profitable business case
for providers.


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Written by Arjen van Blokland; Edited by Burritt Sabin

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