J@pan Inc presents the Wireless Watch Japan Newsmagazine:


Commentary on the Business of Wireless in Japan

Issue No. 75 (Lite Version)
Tuesday, October 8, 2002

+++ Noteworthy News
--> KDDI Expects to Offer High-Speed Data Svc Nationwide 2003
--> J-Phone: May Change Brand Name to Vodafone Mid Next Yr
--> In Japan, Cell Phones Call Up Karaoke Tunes, Buy Soda
--> Another Good Month for KDDI

+++ Subscriber Statistics, Corrections, Credits, Administrivia


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+++ Noteworthy News
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--> KDDI Expects to Offer High-Speed Data Svc Nationwide 2003
Source: Dow Jones on Yahoo, Oct. 4

EXTRACT: KDDI Corp. expects to provide its 3G high-speed data transmission
service "1x EV-DO" nationwide via reasonably priced cell phone handsets sometime
next year, a senior KDDI official said Friday. "For 1x EV-DO, naturally we
mustn't violate our principle of being able to use the same handset nationwide,"
Makoto Takahashi, general manager of KDDI's Content Business Department, told a
wireless conference in Tokyo. Takahashi said KDDI hopes to offer 100% coverage
in Japan for the new service and intends to sell compatible cell phone handsets
that have battery lives and retail prices similar to those of its current

COMMENTARY: KDDI have already announced that they plan to introduce 1X EV-DO --
a turbo-charged version of their new CDMA 20001X 3G system -- next autumn. 1X
EV-DO should permit downloads at up to 2Mbps (cCDAM2000 1X works at up to
144Kbps). We heard unofficially last week that KDDI are rather happy with the
new 3G system, and that handsets really do receive 144Kbps in central Tokyo --
sometimes more. Our source also mentioned that KDDI aren't thinking much beyond
1X EV-DO, since it's tough to imagine any application that might need more than
2Mbps. Hmmmm... What about videoconferencing with 5 friends while transmitting
to each a copy of the latest WWJ video that I've got stored on my handset?

Takahashi-san also said that KDDI is planning to release four new handsets this
fall -- Toshiba's A5301T, Sanyo's A3015SA and A1014T, and Kyocera's A1013T;
Toshiba's is EZmovie-compatible, while the others are photo mail-capable.


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--> J-Phone: May Change Brand Name to Vodafone Mid Next Yr
Source: Dow Jones on Yahoo, Oct. 4

EXTRACT: J-Phone plans to offer dual-mode 3G cell phones when it launches its 3G
service in Japan in December, a senior company executive said Friday. "J-Phone
will launch a dual-mode phone because we want to extract benefits from being a
part of the Vodafone group. So 3G and GSM services will be available from day
one," chief marketing and sales officer at J-Phone, Richard Timmons said at a
wireless communications conference in Tokyo.

COMMENTARY: It's been a busy few months for the J-Phone folks. In September,
they told WWJ roaming would be achieved via the UIM/SIM card (so-called "plastic
roaming"); now it appears that they will indeed have a dualmode chipset-level
handset. We spied one 3G model at CEATEC last week from Sanyo, but no one at the
booth could (or would) confirm anything about GSM compatibility. In any event,
it makes great sense and would be a major (indeed, perhaps the only) point of
competitive differentiation between W-CDMA on J-Phone vs. FOMA. J-Phone's
Timmons also said that certain 3G models will be capable of being used in the
US; there would be one handset that would include the US standard, as well as
[one for] the GSM and 3G standards. A foreign user of the handsets would be able
to use them in Japan -- a first in recent memory. He also stated that battery
life and retail price of J-Phone's 3G handsets will be competitively priced in
comparison to J-Phone's rivals' handsets (that would be, directly, DoCoMo).

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--> In Japan, Cell Phones Call Up Karaoke Tunes, Buy Soda
Source: AP, Oct. 6

EXTRACT: While fancy wireless services may not excite Americans yet, Japanese
can't get enough. Cell phones that can buy soda from vending machines, call up
your favorite tunes from a karaoke machine and send video were among innovations
on display at the CEATEC exhibition in Chiba, a Tokyo suburb, this past week.
Ring-tone downloads, video games and email are mere child's play for Japan's
cell phones, which now come with digital movie cameras, infrared links and
satellite positioning systems. Because of the relatively high cost of getting
online via a personal computer in Japan, Internet access is virtually standard
for the 60 million cell phones in use here. About 90 percent of the nation's
Internet users connect from their cell phones.

COMMENTARY: We love it when foreign media cover Japan's wireless technology --
they invariably get at least something utterly wrong, but their charming
mesmerization with what we all take for granted excuses their ignorance. ;-)
Once again, the cost of fixed-line access plays very little or **no** part in
Japan's mobile Net boom. Today, Japan is one of the cheapest countries in the
world in which to access the Net via broadband (DSL, cable, fiber) from home for
both ISP and telecom fees; it is substantially cheaper than in most US markets.
Moreover, even in Feb. 1999, when i-mode et al were launched, home Net
penetration -- at a time when Net access was admittedly rather expensive -- was
still no lower than than in Germany, and no one runs around saying that the
mobile Net in that country has ever been a success because of high fees (in
fact, WAP was a flop and everything was put on hold until E-Plus launched i-mode
using the Japanese model). Now that our spleen has vented, note that this is a
great news item to read to remember just how advanced common, everyday mobile
Web services here appear to a non-Japan-based observer. We'd rather be in the
land of i-mode (and **great** tempura) than almost anywhere...

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--> Another Good Month for KDDI
Source: BWCS, Oct. 7

EXTRACT: The growth of the Japanese cellular market has slowed once again over
the past month, although KDDI continued to attract new users to its high-speed
cdma2000 1X service. In total, Japan痴 mobile operators added around 459,000 new
subscribers in September, which was down on the growth reported in September
2001 and was the tenth straight decrease in subscriber growth compared to one
year previously. Market leader NTT DoCoMo signed 239,000 new users last month,
to take its total subscriber base to more than 42.16 million, but only around
2,200 of these chose DoCoMo痴 FOMA 3G service. NTT claimed just 135,000 3G
subscribers at the end of September.

COMMENTARY: In a report to investors, CSFB's Mark Berman said that total
subscribers were up 0.6% MoM and 9.4% YoY, but net adds declined 29% YoY
(cellular only). By carrier, net adds came to: +239K cellular, -19K PHS for
DoCoMo; +100K cellular for J-Phone; and +119K cellular, +3K PHS for KDDI (for
50%, 23%, and 27% shares, respectively). Of total CDMA2000 1X net adds, 45% were
new KDDI subscribers, while 55% were upgrades by existing KDDI subscribers.
J-Phone sold 383,600 new Sha-mail-capable handsets, taking their base of
Sha-mail owners to 6.7 million (note that 80-90 percent of handset owners
regularly use Sha-mail). Berman also said that KDDI's subscriber windfall may
not be helping profitability, since handset subsidies remain high. DoCoMo's
high-end, 2G 504i-series phones can be purchased for about 22,000 yen retail,
while the KDDI CDMA 1X models go for as low as 2,800 yen (according to a survey
by Impress Magazine).

+++ Subscriber Statistics, Corrections, Credits, Administrivia

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