Often lumped together by default, there's no other place where IT and telecommunications truly merge than in Japan's mobile phone and wireless data communications markets. For 90 million mobile users, the ketai is not just a phone; it's essential for text messaging, surfing the Internet, playing games and even watching TV. Sure, broadband has come a long way, but next-generation applications point to a largely untapped emerging market.
This marketplace is a twilight zone, somewhere between the airwaves and cyberspace. It's prime real estate for both voice and data communications, with a hybrid of hardware-demand potential unique to both. Even advertisers, who spent 39 billion yen on direct ads to mobile phones and other handsets in 2006, are staking their claim in this new frontier: They'll spend more than three times that amount on such ads in nearly as many years, projects Dentsu Communication Institute, Inc.
On both ends of the voice/data spectrum, service providers are jockeying to lay claim to this lucrative middle ground. New kid on the block Emobile Ltd. is Japan's first new mobile operator in 13 years. It recently unfurled plans to put off voice service until 2008 to focus solely on taking the emerging market of high-speed wireless data communications by storm. Starting with Tokyo, Nagoya, Kyoto and Osaka, the company promises to undercut competitors by 30 to 70 percent for fast, fixed-rate broadband service.
Based on 3.5G HSDPA (new third-generation mobile) technology, the service boasts a maximum downlink speed of 3.6 megabits per second and uses the EM ONE handheld terminal developed jointly with Microsoft Corp. and Sharp Corp. Emobile unveiled the ultra-thin terminal with keyboard in February announcing its wide-screen (VGA, 800 x 480 dots) and high-definition TV reception would soon be available at appliance outlets, reports J-Cast Business News. Emobile, however, is not the only top-tier telecom firm eyeing next-generation technologies for high-speed wireless data communications (though it is the most aggressive).
It's a fact the government has taken note of - and is also taking steps to do something about. The Telecommunications Ministry will solicit applications in July for licenses that may be issued by this fall to operate on the 2.5-gigahertz frequency band. Combining mobile and wireless LAN services, it's expected to help usher in a new era of high-speed data communication that allows fast, stable reception (such as video or Internet data) even when traveling at speeds up to 100 kph, according to The Asahi Shimbun.
What's most notable about state plans to allocate the licenses is that the ministry has already announced that four of the nation's biggest telecom players who are already licensed to provide 3G services - NTT DoCoMo Inc., KDDI Corp., Softbank Mobile Corp. as well as Emobile - will be denied the new licenses, Asahi Shimbun reports. The surprise development comes as regulators hope to nurture what most of these big names saw as a small niche market for the taking, into a vital self-sustaining sub sector with substantial potential for growth.
ADSL service provider Acca Networks Co. and Willcom Inc., Japan's largest PHS service provider, are among those so far expected to get state licenses to operate on the high-speed frequency. Asahi Shimbun reports that while Acca plans to offer service based on the WiMAX standard for wireless broadband access advocated by Intel Corp., Willcom will use its next-generation PHS technology.
Whether the real advantage lies with the 2.5-gigahertz frequency band, innovative approaches such as Emobile's 3.5G HSDPA or something else is yet to be seen. Similar to the broadband revolution that made ADSL a household name in Japan after 1999, however, the real advantage is likely to be some combination of all the above.