U.S. Wireless Industry Eyes Japan's Success

With wireless Internet usage in the U.S. falling short of analysts' projections, many industry officials are eyeing the wildly successful I-mode wireless Internet service rolled out two years ago by NTT DoCoMo Inc. in Japan.

In a speech at the recent Cellular Telecommunications & Internet Association's conference here, Takeshi Natsuno, executive director of the gateway business department at NTT DoCoMo, said I-mode now has 21 million active subscribers, each paying an average of $20 per month.

I-mode's success has been scrutinized by U.S. firms partly because Tokyo-based NTT DoCoMo recently bought 16% of Redmond, Wash.-based AT&T Wireless Services Inc.

The two companies have formed a subsidiary in the U.S. to focus on streaming media content that can be delivered wirelessly to handsets starting in 2003. That system will use much faster connections than are now available, said AT&T Wireless Chief Technology Officer Rod Nelson.

Not Just for Kids

Ages of NTT DoCoMo I-mode users:

Teens: 7%

20s: 43%

30s: 21%

40s: 29%

Source: NTT DoCoMo, Tokyo

While streaming audio and video might seem important only to technophiles who play games, AT&T and NTT DoCoMo officials claim that rich sound, color graphics and even streaming video will eventually matter to workers in large U.S. businesses.

Salespeople on the road, for example, could use streaming media to offer new pitches to clients or prospective customers during important sales calls, Nelson said. And other workers could use the service to gain access to graphically rich corporate intranets.

"This will add value to the corporate environment, but the service can't be priced too high for IT managers to accept," Nelson said.

Analysts pointed to I-mode features and social and environmental factors that fueled its success. In Japan, for example, wired Internet connections are harder to find, slowing the growth of that nation's Web-based home PC market while making wireless communications a more viable alternative for users. In the U.S., where wired Internet connections are more readily available, there has been less call for wireless Internet access, said analyst Andrew Seybold, publisher of the online newsletter "Wireless Outlook."

But Seybold said he believes the biggest factor in I-mode's success has been the extensive network coverage. Although there are many gaps in wireless service in the U.S., such gaps are rare in Japan and Europe, he said.

Seybold and analyst Iain Gillott, founder of iGillott Research in Austin, Texas, both noted that the cultures are very different. "I'm not sure we can bring I-mode over here," Gillott said.

What is likely to carry over from Japan is the heavy use of packet-based billing, said Alan Reiter, an analyst at Wireless Internet & Mobile Computing in Chevy Chase, Md. Under that billing model, users are charged based on the number of packets they receive over their phones, which helps lower costs.

This story, "U.S. Wireless Industry Eyes Japan's Success " was originally published by Computerworld.

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