In an effort to kickstart the growth of third-generation (3G) mobile services Japan’s largest wireless operator NTT DoCoMo has announced that it is to aid equipment manufacturers in the development of handsets. The cellco will contribute approximately 50% of the development costs for new handsets, in a move which it hopes will reduce the cost of handsets and encourage uptake. In addition to expediting the release of 3G handsets, DoCoMo also hopes that its assistance will give it joint control over patents and copyrights associated with the developments it is sponsoring. The three companies set to receive subsidies are Fujitsu, which did not manage to have a single handset ready for the launch of 3G in Japan in October 2001, Matsushita and NEC. The last two have been forced to pool their resources in 3G development due to the massive costs involved. All three manufacturers are part of the ‘NTT Family’ of approved suppliers.
One of the major reasons for the failure of 3G to take off in Japan has been the lack of suitable handsets. Of all the telecoms markets in the world Japan would seem to be the most likely candidate for substantial growth. It already has an established market for wireless data services through its i-mode offering and historically subscribers have been early adopters of new technology. At the end of September 2002 DoCoMo claimed that 83% of its customers were subscribing to i-mode, while the equivalent figure for its 3G offering FOMA was only 0.3%. DoCoMo is clearly missing out on a substantial potential market for 3G services. It is, however, willing and able to help its suppliers since it has the luxury of being one of the few major wireless operators in the world without crippling debts.