DoCoMo Looks To End 2G Services
By Carlo Longino, Fri May 27 16:15:00 GMT 2005

Reports out of Japan say NTT DoCoMo will stop development of 2G handsets, the first move towards shifting all its existing users to its 3G network.

NTT DoCoMo has spent much of the last year trying to attract users to its FOMA 3G service, and now has about a quarter of its subscribers using it. This, however, pales in comparison to the 92 percent of KDDI users on that operators' CDMA 1X or EV-DO networks. Now, a Japanese newspaper is reporting that DoCoMo will only release a few more 2G handsets this year, and will stop development of the devices. The company's handset partners, including NEC and Panasonic, have reportedly already stopped R&D on new 2G designs.

DoCoMo has begun to expand its range of FOMA handsets, rolling out a cheaper line of models earlier this year, and plans to bolster the lineup by doubling the number of suppliers it uses and adding in more foreign vendors to increase competition. KDDI's handset lineup is widely held as being stronger than DoCoMo's current 3G offering, and the ability of its devices to access services like Chaku-Uta Full music downloads are widely cited as one of the reasons for its strong performance in gaining high-speed subscribers.

The company has also identified international roaming as an area where it can boost ARPU, so some of the new handsets will be dual-band devices capable of operating on UMTS networks outside the country.

DoCoMo's networks are at something of a turning point. It said in February that it would stop accepting new users on its PHS network, and said earlier this month it would delay the launch of its HSDPA network, blaming a lack of content, when problems with the technology looks the more likely culprit. But in any case, DoCoMo is feeling the same pressures as other carriers around the world, like Vodafone, to shift users onto its 3G network in hopes of delivering an ARPU boost. It's important for the carrier, though, to widen and improve its range of 3G handsets on offer. The idea is that people will be forced to buy a new 3G handset to replace their 2G device, but what's to keep a user from switching to KDDI -- and its more attractive handset lineup -- if they're being made to get a new phone anyway?