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NTT DoCoMo explains decision on limited 3G rollout

NTT DoCoMo said Thursday that software glitches were behind its decision to limit its initial offering of a superfast new cell phone technology.

NTT DoCoMo had repeatedly promised to start 3G, or third generation, wireless service by late May. That would have made the Tokyo company the world's first to offer such commercial service -- a supercharged wireless that was supposed to eventually turn cell phones into miniature computers for surfing the Net, downloading music and watching movie reviews.

On Tuesday, NTT DoCoMo said it will limit its rollout of the service to 4,000 people in the Tokyo area and wait on full-fledged commercial service until October.

At that time, a spokesman denied that technological problems were behind the delay, but he apparently meant equipment hardware.

NTT DoCoMo official Shiro Tsuda said on Thursday that software bugs had cropped up in the network, handsets and base stations, which send out the waves -- requiring a test run to clear up the problem.

NTT DoCoMo President Keiji Tachikawa insisted that the May 30 test run marked the official start of 3G, denying any delay. NTT DoCoMo merely found a wiser way to embark into untested territory, he said.

"This is the new way to start a new service," Tachikawa said. "People are going to be using it. And we're charging money. It's not some scam."

The users for the test-run will not be charged for the handsets but will pay transmission fees about 1.8 times the current charge for DoCoMo phones -- with the higher fee being about 100 yen (80 cents) or 150 yen ($1.25) for a three-minute song. They will be chosen by lottery from a pool of applicants.

Three handset models will be available, including the much-touted video phone that will show the caller on the other end of the line on the tiny cell phone screen.

The model will also be able to show other types of video. At the onset, users will be able to look at video that is part of DoCoMo's image-distribution service, offering more than 100 programs such as news and short film clips for a video-gadget called Eggy that went on sale five months ago.

NTT DoCoMo does not release sales figures for Eggy.

Tachikawa said it was up to the businesses that decide to sell video on 3G and not to NTT DoCoMo to explain what people could be watching in the future.

Another 3G model is a faster version of the current DoCoMo Internet-linking "i-mode" phones that have attracted nearly 23 million users in Japan.

The third model will be a card-type device strictly for data transmission. The 3G technology will allow up to 40 times faster transmission of data.

NTT DoCoMo's cautious start with 3G is unlikely to damage its strong profits or competitive edge over its rivals in the Japanese wireless market.

"People outside Japan were not surprised they delayed the service," said Kirk Broody, an analyst with Dresdner Kleinwort Wasserstein in Tokyo. "If they don't meet the October deadline, people will sit up and notice."

The 3G service will still be limited to the Tokyo area Oct. 1, expanded to Osaka and Nagoya, two cities in central Japan, by December, and then to other major cities by spring 2002, NTT DoCoMo said.

The company has limited ambitions for 3G service, targeting 150,000 users in the first year. About a quarter of that number sometimes signs on by the day to i-mode.

NTT DoCoMo plans to offer 3G in both Europe and the United States in the years ahead. It plans to offer i-mode in the United States as early as next year through partner AT&T Wireless, and later this year in some parts of Europe.

Domestic rival J-Phone Group initially slated its 3G start for the Tokyo area for December, but recently put it off until June 2002 to give it more time to develop equipment and test the system thoroughly. Two British companies, Vodafone and British Telecommunications, own stakes in J-Phone.

From NJ.com, http://www.nj.com/newsflash/index.ssf?/cgi-free/getstory_ssf.cgi?f0090_BC_Japan-CellPhones&&news&newsflash-financial

Posted on 26 April, 2001