Competition Heats Up in Japan's 3G Market
By Eric Lin, Tue Jan 06 23:15:00 GMT 2004

NTT DoCoMo launched its 3G FOMA service over a year ago, placing Japan firmly at the head of the line for next generation phone services. However data rates were slower than expected, and 3G apps weren't significantly compelling over 2G offerings. Now KDDI is about to launch a new higher speed data service, Vodafone Japan hopes to add more handsets for their 3G network, and DoCoMo will complete their nation-wide FOMA network in the next few months.

The Japan Times outlines the upcoming 3G landscape and includes predictions from analysts as well. Gartner Japan predicts 3G phones will outnumber 2G models by 2006. Another analyst from ING makes the case for unlimited data tariffs such as the one KDDI has begun offering, by stating that 3G sales will not pick up simply because operators add more features.

DoCoMo will expand their 3G network to cover 99% of Japan by the end of March, as well as radically improve their handsets. DoCoMo believes that increasing coverage and battery life, as well as offering compelling applications (like video calls with avatars) will be enough to compete against KDDI and Vodafone.

KDDI is improving their unlimited "AU" tariff by moving to CDMA 1xWIN. KDDI is claiming a maximum download speed of 2.4 megabits, but no real world throughput tests tell us the average network speed yet. KDDI is hoping their unlimited data package and new speed network will add up to 450,000 subscribers in the first quarter.

Vodafone are relying on their position as an international carrier as their strength. They will be launching a dual mode GSM-GPRS / WCDMA handset that subscribers can use on Vodafone's international GSM network when traveling abroad. They have the fewest 3G subscribers and are relying on 2G networks and low to middle end users to prop themselves up.

To further compete with KDDI, DoCoMo said it may launch an unlimited tariff for it's new FOMA handsets. As DoCoMo and KDDI compete for the most appealing price and services, will they grab all the 3G market, or will Vodafone step up to the plate with an original, or at least competitive offer?