IPMobile’s dream over before it’s even begun

27 Sep 2007

Japanese start-up IPMobile is reported to be ready to abandon plans to launch a new mobile broadband service in Japan and return its licence to the communications ministry, writes Kyodo News citing people familiar with the situation. It is understood that IPMobile is unlikely to meet its November launch deadline due to problems in raising the necessary funding for the venture and instead could now file for bankruptcy or pursue other liquidation measures. The company was awarded a concession to provide 3G cellular services using 2GHz spectrum suitable for UMTS-TDD technology by the Ministry of Internal Affairs and Communications (MIC) in November 2005, on condition it launched commercial services within two years.

The operator had originally planned to launch services in three cities in October 2006, but was later forced to scale back to Tokyo only. It then said it planned to launch a fully-fledged commercial service in the capital in the first half of 2007, but has since had to revise this schedule again. In April this year IPMobile’s majority shareholder Multimedia Research Institute Corp sold its entire holding to Mori Trust Company, which became its new owner. Mori Trust subsequently sold all of its shareholdings in the venture to California telecom firm NextWave Wireless in August. However, Mori Trust, which has no experience in the telecoms market, recently bought back the 69.23% stake in IPMobile under an option in the agreement. The move was apparently motivated by the Californian telco’s determination that it would be impossible to operate profitably in the Japanese market. Mori Trust has now decided that it will be impossible to find another sponsor by November.