1

3G Mobile Services in Japan

Hideki Yagi

Communications and Information network Association of Japan

10th ATIE

2

Changes in the Number of Cellular Phone Subscribers

Source: MIC

0

10

20

30

40

50

60

70

80

90

1996 1997 1998 1999 2000 2001 2002 2003 Feb.2005

Feb.2005(FY)

3G(33%)

Number of mobile phone

subscribers(86 mil.)2000

First mobile phones with

cameras

2001Start of 3G

service

Million subscribers

1999Start of mobile internet access

service

Mobile phone with camera

(75%)

Can connect with Internet

(86%)

3

ContentsProvider

Information Charges

Info

rmat

ion

Charg

es

Com

mis

sion

fee

(9%

of I

nfor

mat

ion

char

ges) Inform

ation

Outline of i-mode

i-mode success factorsi-mode Business Model

Use of packet network enables inexpensive always-on access.

Use of Internet standards: TCP/IP and HTML subset

Attractive handsets.

Build a WIN-WIN relationship with content providers.

i-mode users

NTT DoCoMo

Packet Communications Charges

4

Roll out of 3G Commercial Services Roll out of 3G Commercial Services

2001 2002 2003 2004 2005 2006

NTT DoCoMo

W-CDMA

HSDPA

KDDI CDMA2000 1XCDMA1xWIN(EV-DO)

Vodafone W-CDMA

Dec DecOctMayIntroductory

Service

: Launch of Commercial Service

Apr

5

Classified Subscribers of Cellular Phone

Carriers2.5G

3GTotal

W-CDMA CDMA2000

NTT DoCoMo 38.8(-1.3)

10.2(+1.8)

48.3(+0.5)

KDDI au 5.3(-0.3)

17.4(+0.6)

22.7(+0.3)

Vodafone 14.4(-0.4)

0.7(+0.3)

15.1(-0.1)

Total 57.8(-2.0)

10.9(+2.1)

17.4(+0.6)

86.1(+0.7)

as of Feb 2005 (Millions)

( ): Compared with End of Dec. 2004

6

Improvement of 3G Handsets Performance 2002

Initial Model

2003.01-

Models

Latest

Models

Latest 2G (PDC) Models

Weight 150g 120-130g 109-130g 92-130g

Size 204CC 110-120cc 110-120cc 91-120cc

Dynamic Standby time

55 hours 180 hours 350-450 hours

400-420 hours

Continuous talk time

90 min 130 min 140-170 min 125-145 min

Camera features X 100,000-300,000 pixels

2M pixels 1-2M pixels

Packet Transmission Speed (Max.)

384kbps 384kbps 384kbps 28.8kbps

Video phone X O O X

Actual Price US$400 or more

US$250 US$300 US$120-150

Price: in the case of the migration from the model in use

7

Enriched Handset Lineup (1): FOMA 901i Series

The Basic

features of

FOMA 901i

handsets have

been upgraded!

Realistic audio-visual effects when using i-appli

3D sound X 3D graphics

Larger file size to store ring tones, “check-motion” video clips and i-mode mail attachment files

Expanded files size

Enhanced multimedia capabilityNotifies incoming mail with “chaku-motion” video clips, upgraded FlashTM functionality

Enhanced securitySecurity scan (anti-virus function), FeliCa remote lock

Convenient features

Menu screen (customized icons), Mail (chat mail), Installed music player in all models

SH901iC

F901iC

N901iC

D901i

P901i

8

Enriched Handset Lineup: Dual-mode FOMA+W-LAN handset

Allows businesses to create a complete IP-based corporate communication network.

Provides seamless voice and data access from both inside and outside office.

9

22

60

9199 99.9

Outdoor(Pop. Coverage: %)

Indoor(No. of systems)

[Outdoor] POP coverage (%)

FY20042H

+1,500(forecast)

FY20041H

+630

Nationwideservice launch

2002/4

Metropolitan areaservice launch

2001/10

[Indoor] No. of systems

No. of BTSsApprox. 14,900

40 70150

1,670

2,000

2,300

2,800

3,800

No. of BTSsApprox. 17,300

FOMA Coverage Expansion

0

20

40

60

80

100

0

1,000

2,000

3,000

4,000

5,000

2002/3 2003/3 2004/3 2005/3E 2006/3E12

Outdoor population coverage reached 99.9%.Outdoor population coverage reached 99.9%. Aggressively rolled out IMCS indoor systems in FY2004.Aggressively rolled out IMCS indoor systems in FY2004. --FY2003: 1501,670 systems (Up 1,520) - FY2004 (planned):1,670 3,800 systems (Up 2,130) -FY2004 1H: 1,670 2,300 systems (Up 630) - FY2004 2H (Planned): 2,300 3,800 systems (Up 1,500)

10

FY2002

(02/Apr.-03/Mar.)

FY2003

(03/Apr.-04/Mar.)

(Projected)

FY2004

(03/Apr.-04/Mar.)

Operating

Revenues45.8 48.1 45.9

Operating

Income10.1 10.5 7.9

Net Income 2.0 6.2 7.2

EBITDA 17.5 17.7 15.3

Capital

Expenditures8.1 7.7 8.1

Billions of US$

Achievement of NTT DoCoMoAchievement of NTT DoCoMo

11

ARPU/MOU of NTT DoCoMo

60.8 48.1 56.4 65.7 51.6 62.4

16.625.6 18.7

32.2

18.0

32.1

153159167

109

234219

0

50

100

150

200

250

FY2002 FY2003 FY2004

ARPU (US$)Data

ARPU(US$)Voice

MOU (Minutes)3G

MOU (Minutes)2.5G+3G

2.5G+3G2.5G+3G 2.5G+3G 2.5G+3G3G 3G 3G

77.4 73.7 75.1

97.9

69.6

94.5

(Apr.-Dec)

60.8 48.1 56.4 65.7 51.6 62.4

16.625.6 18.7

32.2

18.0

32.1

153159167

109

234219

0

50

100

150

200

250

FY2002 FY2003 FY2004

ARPU (US$)Data

ARPU(US$)Voice

MOU (Minutes)3G

MOU (Minutes)2.5G+3G

2.5G+3G2.5G+3G 2.5G+3G 2.5G+3G3G 3G 3G

77.4 73.7 75.1

97.9

69.6

94.5

(Apr.-Dec.)

12

Linkage with Brick-and-Motor Businesses: Mobile Wallet Service

Released

mova model

Released

FOMA model

Released

new FOMA

models