What can U.S. learn from Japans 3G experience

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What can U.S. learn from Japans 3G experience?

• Erica Cheng
• December 6, 2005

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Past
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Three Generations of Cellular Systems

• 1983-1992 First Generation (1G) Analogue --US
  dominance (AMPS)
• a) Mobile voice communications
• b) No data service
• 1992- 2001 Second Generation (2G) Digital
  (circuit-switched networks) --Western Europe
  dominance (GSM)
• a) Digital voice service
• b) One-way data transmissions only
• c) Enhanced calling features (called ID)
• 2001-2008/10 Third generation (3G) Multimedia
  (packet switched networks) --a single flexible
  standard (W-CDMA)
• a) Superior voice quality
• b) high-speed mobile internet (Up to 2M
  bit/sec always-on data)
• c) Broadband data services like video
  and multimedia
• d) Enhanced roaming
• The sequence of the phases has been similar, but
  the timing has differed. (Steinbock, 2003,
  p.211)
• New policiesmonopoly? competition
• Innovationproprietary patents? openness and
  standardization
• Marketsoriginal demand? replacements
  (Steinbock, 2003, p. 208)

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Social Necessity of Technologies Transitions in
Cellular Industry

• The transition from 1G to 2G was primarily
  motivated by 2Gs
• a) more efficient use of radio spectrum
• b) increasing market demand for wireless
  telephony.
• The 3G system came into being due to
• a) the demand of new features
• b) more efficient services desired by the
  highly successful 2G cellular phone markets in
  the early 1990s.
• The development of each generation is aimed to
  provide higher data rates and additional
  capabilities, which can be viewed as a kind
  remediation on the older technology.

The sequence of the phases has been similar, but
the timing has differed. (Steinbock, 2003, p.211)
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Timeline of Cellular Systems Development in U.S.
and Japan
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Mobile phones in the U.S. and Japan
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How U.S. lost industry leadership in wireless
communications

• Delayed 3G governing policy
• 196882 Industry wars between FCC, DoJ, ATT,
  RCCs, equipment manufacturers.
• Incompatible wireless standards
• Standards debates market fragmentation
  Indecision with standard policies.
• A lack of available 3G spectrum
• Licensing chaos the FCCs cellular licensing
  begins
• Source Steinbock, p. 220, CTIA

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Present
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The Development of mobile market in Japan
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Noticeable Trends in Japans Cellular Market

• Mobile networks carry more data traffic than
  voice traffic
• Japan's 3G networks already account for all net
  new service subscriptions
• Japan 3G subscribers 39.429m
• 3G user percentage in total mobile
  subscribers is about 40 (Updated 11/30/2005)
• More than one thousand WiFi public access points
  are already available around Japan and dual
  WiFi-cellular devices are already available.

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What leads to Japans 3G success?

• 3 factors of 3G success in Japan
• Network
• Good Cellular Network Coverage
• Handsets
• Wide Variety of Advanced Cell Phones and
  Appealing Contents
• Economical prices of cell phones, encourage
  yearly upgrades.
• --cell phone has become a fashion item,
  rather than a practical technology.
• services
• No charge for incoming calls, which helps lower
  basic voice telephony rates and drives users to
  spend this part of expenditure on more data
  services.
• iMODE platform, which settled the ground for 3G
  data service and has put in data connectivity
  throughout Japan. I-Mode service can be viewed as
  an prime transition from 2G to 3G service, which
  successfully establish the habit of using cell
  phones to transmit data in Japan.

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What is iMode?

• i-Mode is a mobile internet business system with
  45 million users and more than 3000 participating
  companies performing a great variety of mobile
  business transactions, from email, booking rail
  and air-tickets to games. I-Mode service
  includes both a proprietary "walled-garden"-type
  official menu, mainly used for selling content
  and games and providing information services, as
  well as a completely open free access to the
  internet.
• In Japan i-Mode relies of DoCoMo¹s 2G and 3G
  packet switched DoPa data networks. Business
  transactions over i-mode are many billion
  dollards per year, and i-Mode has become an
  important part of Japan¹s social and commercial
  infrastructure. i-Mode and competing systems have
  been completely integrated into the daily life of
  most Japanese people. (Eurotechnology Japan K.K.,
  What is i-mode? / Encyclopedia-type definition of
  i-Mode).

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Existing Problems of Cellular Industry in U.S.

• Insufficient network coverage
• better coverage to metropolitan cities, the
  coverage in rural area is sparse and often out of
  service.
• Offer only the basic features, such as voice
  calling and text-messaging, to their subscribers.
  
• The failure for WAP (Wireless Application
  Protocol) to receive the universal support it
  expected, in part due to its lack of an always
  on feature.
• high service costs
• Lack of variety and matching hand-held devices
• Lack of usable (appealing) content

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Future
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Comparison of U.S. and Japan (1/2)
Source Statistics Bureau, MIC United Nations
Computer Industry Almanac Inc.
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Comparison of U.S. and Japan (2/2)

• Cellular Network Coverage (Geography Population
  Density
• Cellular phone usage habits (Commuting)
• U.S.? Voice traffic
• Japan? Data traffic

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Merger of Cellular Operators in
U.S.Intercarrier Compensation on Network
Coverage

• In 2004, Cingular Wireless acquisition of ATT
  Wireless and the merger between Sprint and Nextel
  have concentrated the wireless market into the
  hands of three players
• Cingular Wireless, Verizon Wireless, and
  Sprint Nextel
• Contributions
• Cost-saving on spectrum/license/infrastructure
  fees
• Rural cellular networks establishment

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What can U.S. learn from Japans 3G experience?

• Enhance Network Coverage
• Selling services rather than selling technology.
  (Steinbock, 2003, 216)
• No charge for incoming calls
• Wide Variety of Advanced Cell Phones and
  Appealing Contents
• Economical prices of cell phones

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Bibliography

• S., Yazbeck. "The US road to 3G an overview of
  telecom regulations, carrier strategies, and the
  consumer market." Telecommunications. 1 no. ICT
  2003. 10th International Conference on, (2003)
  25- 32.
• Steinbock, Dan. "Globalization of wireless value
  system from geographic to strategic advantages."
  Telecommunications Policy. 27, (2003) 207-235.
• Minges, Michael. "Is the Internet mobile?
  Measurements from the Asia-Pacific region."
  Telecommunications Policy. 29, (2005) 113-125.
• Nurvitadhi, Eriko. Trends in Mobile Computing A
  Study of
• Mobile Phone Usage in the United States and
  Japan. A Thesis
• submitted to Oregon State University.(2003)
  0-71
• GLEN DOSS. Americas Race for 3G. Retrieved
  November 23, 2005, from http//www.gdoss.com/web_i
  nfo/3g.pdf.
• Broadbandreports.com. (2002). Cellphones in
  Japan. Retrieved November 24, 2005, from
  http//www.dslreports.com/shownews/14578
• Eurotechnology Japan K.K. What is i-mode? /
  Encyclopedia-type definition of i-Mode).
  Retrieved November 24, 2005, from
  http//www.eurotechnology.com/imode/index.html

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Questions?