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 The long-awaited FOMA (Freedom of Multimedia Access) service, which was launched after several months of delays due to technical difficulties, allows users to browse Internet content, send and receive e-mails and view the person they are talking to over their mobile handsets. Although the maximum access speed of FOMA is 384kbps, it is expected that average speeds are more likely to be around 10 times faster.
FOMA will be initially available within a 30-kilometre radius in downtown Tokyo, expanding to two other major cities, Osaka and Nagoya, by the end of the year. The company said that it planned to spend USD8.4 billion a year over the next three years to roll-out the service nationwide.
FOMA is described as an advanced version of DoCoMo's I-mode service. I-mode, which gives users limited access to the Web and allows them to send and receive e-mails, has more than 27 million subscribers in Japan.
DoCoMo is being careful not to over-hype the service and said it expects to have 200,000 3G customers in its first year and six million subscribers by 2004. According to DoCoMo president, Keiji Tachikawa, the average customer will generate USD84.84 per month. At the moment, DoCoMo's monthly average revenue per user is USD60.97 for voice services over I-mode and USD12.28 for Internet services. The company does not expect to turn a profit on the 3G service until 2004.
"The migration from 2G to 3G phones will revolutionise telecommunications, so the first company to launch the new technology will face the highest risks," commented Tachikawa.
Additional services available over FOMA include circuit-switching, which offers 64 kbps uploading/downloading speeds for large-volume data, and multi-access, which DoCoMo described as the mobile equivalent of multitasking. This means that customers can talk and surf the Web or send e-mails at the same time.
Although much has been made about the potential for mobile operators to generate revenue through providing multimedia content such as video clips over 3G, it is expected that voice will remain as the main money-spinner in the 3G environment. This will benefit NTT DoCoMo in the short-term as there is currently a lack of appropriate 3G content. Last week, for example, Tachikawa said that its 3G moving picture distribution service would be delayed for several months because of the limited availability of content, mainly due to copyright issues.
Certainly, the world's leading mobile operators will be watching very closely how 3G fares in Japan. After spending USD100 billion on 3G licences in Europe, mobile companies know their future may depend on whether 3G becomes popular among users and can generate sufficient revenue to cover the massive 3G investments.
NTT DoCoMo was up over six percent in early trading in London on Monday to STG17.075 following the successful launch of its service.
NTT DoCoMo can be found at http://www.nttdocomo.com.
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