Mon, 21 Jul 2003

Japan joining Korea in driving CDMA2000

Zatni Arbi, Columnist, Tokyo,

"No wonder your voice is crystal-clear," my brother said when I told him I was calling from Tokyo. No wonder, indeed. Each time we talk to someone in Singapore, Japan, the U.S. or any other country with an advanced telecommunications infrastructure, it is just as easy to believe that the caller is just next door.

But calls from next door might not be that clear when even calls made using two different phone lines in the same house can be plagued by crackling, popping noises and a muffled voice. The fact is that the two telephones still have to connect via a switch. That means that the conversation can only be made through the local infrastructure, which does not seem to offer the best possible service.

My brother was even more impressed when I told him I was talking to him using an a u-cell phone (pronounced `ey yu') provided by KDDI, which is the fastest growing telecom operator in Japan.

Qualcomm, the company that provides technology to KDDI, invited groups of IT journalists from Indonesia, Taiwan and Vietnam to see how CDMA operates from Japan. My IT journalist colleagues and I were allowed to call anybody in Indonesia, or for that matter in the world through the KDDI direct dialing service. All we had to do was punch 001 010, followed by the country code number and the mobile or fixed line number that we wanted to reach.

Not surprisingly, suddenly everyone was talking to family members, relatives and friends in Jakarta, Ho Ci Minh City, Taipei and who knows where else. We continuously tested the network by making calls from inside our coach, from Tokyo's famous underground stations and even from the restaurant on top of the New Otani Tower Hotel. We encountered absolutely no problems.

The reliability and availability of the network were, to put it mildly, very impressive. The only time I failed to reach my wife's phone number was when she was on her way to Glodok, and it was because Telkomsel's - and not KDDI's -- network was busy.

A cell phone heaven

Those with an interest in mobile telecommunication will be familiar with the fact that Japan is one of the countries with the highest mobile phone penetration. At the end of last June, the number of the country's cellular subscribers was around 77 million, or 60 percent of the total population.

Three major operators serve Japan's 127 million population. These are Nippon Telegraph and Telephone Corp. (NTT), KDDI, and J-Phone (which has been taken over by Vodaphone). Established in 1952, NTT has been serving the country for the longest time. It is not surprising that the company serves the largest number of subscribers, 44 million as of June 2003. KDDI is second with a total of 14.7 million subscribers and J-Phone has 14.4 million.

Today, only three types of cellular technology are used in Japan. The majority of phone lines still use Personal Digital Communication (PDC), CDMA2000, and W-CDMA. PDC is offered by all three operators, while CDMA2000 is offered only by KDDI. W-CDMA is provided by both NTT DoCoMo and J-Phone.

As of December 2002, 60 million (82 percent) of cellular subscribers use PDC, 13 million use CDMA2000 and 153,000 (0.2 percent) use W-CDMA. Something to keep in mind is that W-CDMA unfortunately stands for Wideband CDMA, the third generation of GSM technology. This technology has little to do with the Qualcomm-developed CDMA.

Interestingly, the number of CDMA2000 1x jumped to 8.6 million by the end of last June, while the number of W-CDMA subscribers -- according to data provided by the Telecommunication Carrier Association -- was 590,000 (535,000 were subscribers of NTT DoCoMo's FOMA and 55,000 were subscribers of J-Phone's UMTS).

This shows that people are accepting CDMA2000 1x as the next generation of mobile telephones at a rate far exceeding the acceptance rate of W-CDMA (both FOMA and UMTS). According to company data, the number of CDMA2000 1x subscribers reached eight million on May 29 this year, while the number of W-CDMA subscribers hardly increased. This was very encouraging news for KDDI -- and Qualcomm, but not so for the GSM-based W-CDMA even though Japan is considered the breeding ground of GSM technology.

There are a number of reasons for the rise of CDMA2000 1x. According to Qualcomm's officials, upgrading the infrastructure from cdmaOne -- which is considered to represent the second generation (2G) of CDMA technology -- to the next level does not require as much investment as the migration of GSM operators to W-CDMA.

In Japan, the inability of W-CDMA subscribers to use their handsets nationwide leaves them hesitant to change from 2G to 3G, preventing them from taking advantage of the W-CDMA's capabilities. The slower growth of W-CDMA is also due to the failure of those involved to come up quickly with standard specifications.

Meanwhile, the Japanese market has embraced mobile data communication more than ever before. In the last three years alone there has been a five-fold growth in the number of Mobile Internet Subscribers, (from less than 13 million to almost 65 million). An upcoming version of CDMA2000 1x, known as CDMA2000 1xEVDO, will have even better data handling capability, making it a good choice for those wishing to access mobile Internet services. The main strength of the CDMA2000 1xEVDO lies in the fact that it was designed for the IP (Internet Protocol) network rather than the voice network.

At one of the biggest stores in Shinjuku there is a breathtaking array of cell phones. Most of the newer models come with cameras, indicating that the demand for video mail and other multimedia transmissions is set to explode.

Even Casio-made cell phones have the capability to capture up to 15 seconds of video. But sending the video clips will require an infrastructure optimized for this type of data. This gives KDDI (and Qualcomm) a reason to be very optimistic about their future in Japan, and the rest of Asia.

Another driving factor for the growth in mobile data services is the content industry. KDDI has been working together with content providers in Japan: their subscribers have been downloading Chaku Uta, or musical ringer tones with great enthusiasm. Next week this column looks at two very useful application based services and the security offered by KDDI's partners. Content providing and application services are two areas that provide a lot of new business opportunities.