Money It's the Phones: DoCoMo Doubles 3G Subs
By Eric Lin, Fri Jan 30 06:45:00 GMT 2004

After over a year of slow growth to barely a million subscribers, DoCoMo needed only four months to reach two million. They attribute the growth to new handsets and expanded coverage. Signs on the internet point to the handsets more than the coverage.

History is constantly repeating itself, and in the fast paced mobile world, it seems to happen more often. By the time a bad idea fails, ten others just like it are ramping up for launch and it's too late to stop and learn from the first failure. NTT DoCoMo wanted to be the first carrier to launch a 3G service. They launched FOMA as quickly as they could with coverage barely making it past Tokyo and a skimpy selection of handsets. Over the next year, they expanded coverage to cover most of urban Japan, but their numbers barely grew. During this time Hutchinson launched 3 to the same luke warm reception as FOMA, and with an equally skimpy selection of phones. They were following right in DoCoMo's footsteps.

DoCoMo had a good head start, and whether that is the reason or it's just that they're somehow smarter, they beat Hutch to discovering the secret to building a subscriber base. People want cool handsets. Handsets that look good, that do things users actually want to do, and that are easy to use. DoCoMo launched their new line of slim FOMA handsets late last Summer and then it didn't take long for the subscribers to double.

Did coverage contribute to growth? It's hard to say precisely, but I'm guessing only in as much as people knew if they bought a cool new FOMA it would probably work where they live. (Which is more than many can say for their 3 phones.) But, when reading gadget coverage from Japan, the past six months have not been full of posts or articles that said "Wow. I can finally get FOMA coverage now." However they have spent a great deal of time and space talking about the features and the looks of this summer's handsets, and they have been especially interested the upcoming 900i line.

3, meanwhile, have admitted that their handsets are services still lack appeal. Even the feature packed Motorola A920 failed to attract much positive attention from the Gizmodo set. Until they can fill channels with the Sony Ericsson z1010 and other hotly awaited, more stylish handsets, they too are probably doomed to slow growth.

Handsets alone do not guarantee success for a carrier, 3G or otherwise. But this scenario shows that coverage and applications alone are not enough. Customers need that last piece of puzzle- something physical they can be proud of, build a relationship with, a handset they actually like to carry.