1. 1 What can U.S. learn from Japan’s 3G experience? Erica Cheng December 6, 2005

2. 2 Past

3. 3 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 policies—monopoly  competition  Innovation—proprietary patents  openness and standardization  Markets—original demand  replacements” (Steinbock, 2003, p. 208)

4. 4 Social Necessity of Technologies Transitions in Cellular Industry The transition from 1G to 2G was primarily motivated by 2G’s 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)

5. 5 Timeline of Cellular Systems Development in U.S. and Japan SystemsU.S.Japan 1G1983 AMPS 1979 NTT 2G1990s CDMA, TDMA, GSM, iDEN 1993 DoPa 2.5G1999 IMode 3GNot yet2001 FOMA

6. 6 Mobile phones in the U.S. and Japan

7. 7 How U.S. lost industry leadership in wireless communications Delayed 3G governing policy 1968~82: Industry wars between FCC, DoJ, AT&T, RCCs, equipment manufacturers. Incompatible wireless standards Standards debates: market fragmentation: Indecision with standard policies. A lack of available 3G spectrum Licensing chaos: the FCC’s cellular licensing begins Source: Steinbock, p. 220, CTIA

8. 8 Present

9. 9 The Development of mobile market in Japan

10. 10 Noticeable Trends in Japan’s 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.

11. 11 What leads to Japan’s 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.

12. 12 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).

13. 13 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

14. 14 Future

15. 15 Comparison of U.S. and Japan (1/2) ItemsU.S.Japan Population (in millions, 2004) 296127.69 Population Density (persons per square kilometer, 2001) 30341 Mobile subscribers 194,479,364 (Jun. 2005) 93,864,500 (Oct.2005) Penetration Rates 65.5%72.8% Source: Statistics Bureau, MIC; United Nations Computer Industry Almanac Inc.

16. 16 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

17. 17 Merger of Cellular Operators in U.S.— Intercarrier Compensation on Network Coverage In 2004, Cingular Wireless’ acquisition of AT&T 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

18. 18 What can U.S. learn from Japan’s 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

19. 19 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. America’s Race for 3G. Retrieved November 23, 2005, from http://www.gdoss.com/web_info/3g.pdf. http://www.gdoss.com/web_info/3g.pdf Broadbandreports.com. (2002). Cellphones in Japan. Retrieved November 24, 2005, from http://www.dslreports.com/shownews/14578http://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 http://www.eurotechnology.com/imode/index.html

20. 20 Questions?