(keitai-l) Lucent Expects Growth In Japan Cell Phone Use

Hi,

here is an interesting short report about cell phone use in Japan

(Source Yahoo Finance)

INTERVIEW: Lucent Expects Growth In Japan Cell Phone Use

TOKYO (Dow Jones)--U.S.-based Lucent Technologies Inc. (LU) 
expects Japan's mobile phone market to grow to between 80 million 
and 90 million subscribers within the next two to three years, 
said Brian Bolliger, Lucent's director of Wireless Market 
Strategy, Wednesday. 

In an interview with Dow Jones Newswires, Bolliger said that 
the current ratio of mobile-phone users to the total population 
in Japan is around 40%, far above the 30% level which he sees as 
the minimum level for sharp growth. 

"I think you're going to see that (mobile-phone user base) grow 
dramatically, to 80-90 million in two or three years. Above 30% 
there's a real take-off in the market. You saw that in Europe in 
1999 when they went from 25% to 45% in one year. Japan is at that 
point," he said. 

However, the key challenge confronting Japan's mobile phone 
operators such as NTT DoCoMo Inc. (J.NTX or 9437) in expanding the 
local mobile phone market is a narrowing in the bandwidth 
available to these operators, Bolliger said. 

"Right now there's an interesting (Japanese) market situation in 
that the current (mobile phone) technologies are running out of 
spectrum. Operators can't really add as many users as there are 
coming. So, they've got pent-up demand for the new (third-
generation technology) system," Bolliger said. 

Bolliger added that Japanese mobile phone operators can't satisfy 
that demand with the current spectrum bands. "Or it's becoming 
increasingly more expensive to do, like acquiring more sites. 
It's just very difficult to do that," he said 

In Japan, at least three mobile phone technologies are used -- 
Personal Digital Cellular (PDC) system, Personal Handyphone System 
(PHS), and Code Division Multiple Access One (CDMA One) system, 
Bolliger said. Each of these technologies have different frequency 
bands and are likely to use up their entire spectrums early next 
year. 

"One of the early motivations was that the mobile phone operators 
asked for more spectrum, and the government said we'll give you 
spectrum if you deploy 3G. That motivated NTT DoCoMo and others 
to take on a much more aggressive stance on 3G," Bolliger said, 
citing NTT DoCoMo's recent formal filing for third-generation (3G) 
spectrum in Japan. 

Commercial Launch Of W-CDMA Likely In May 2001 

NTT DoCoMo said Monday that it had applied with Japan's Ministry 
of Posts and Telecommunications for approval of W-CDMA, a 
third-generation technology. Cellphones incorporating this new 
technology are expected to be launched commercially in May 2001. 

"One of the unique things about the 3G spectrum in Japan is 
that Japan will be directly in line with the rest of the Asia 
and Europe," Bolliger added. 

He pointed out another motivating factor for Japanese mobile 
phone operators to jump on the third-generation technology 
bandwagon is that the new technology will allow
domestic mobile phone users to go "anywhere in the world." 

Lucent Technologies is providing NTT DoCoMo with base stations, 
radio access, and controllers that connect radio networks to 
the various servers in the networks for third-generation 
mobile communications technology, Bolliger said. 

Referring to possible partnerships with Japan Telecom Co. 
(J.JTC or 9434) or DDI Corp (J.DDD or 9433), Bolliger said: 
"We're working with multiple (mobile phone) operators in 
different capacities. We anticipate a lot of opportunities 
in Japan." 

DDI Corp., a Kyocera Corp. (J.KCR or 6971) affiliate, will be 
the surviving entity of the merger between KDD Corp. (J.KDD or 
9431), IDO Corp. (J.NTS) and DDI which is scheduled to occur on 
Oct. 1. 

Other trends that are expected to accelerate the growth of the 
wireless market in Japan are the way in which consumer devices 
have been built and the focus on entertainment and leisure, 
Bolliger said. 

"You're now seeing the key pieces of technology that, for example, 
allow very small wireless modems to be put into camcorders, digital 
recorders, or game devices. Now you've got people playing games 
over the wireless network," Bolliger said. 

Japan's emphasis on entertainment and leisure is also contributing 
to the fast growth of its wireless market. 

"What (NTT DoCoMo's) i-mode has shown is don't underestimate the 
potential of the entertainment and leisure segment of it. That's 
what you're seeing in Japan and Korea, where you can download 
now songs via the wireless network into your devices," Bolliger 
added. 

He sees the right market forces coming together in Japan and 
Korea to boost the wireless markets in these two countries 
significantly. "You've got the low-cost consumer devices, 
wide appeal, low-cost wireless networks, and the right mix 
of services." 

Lucent Technologies designs and delivers the systems, software, 
silicon and services for next-generation communications 
networks for service providers and enterprises. In the year 
ended Sept. 30, 1999, Lucent Technologies recorded operating 
profits of $6.03 billion and net profits of $3.83 billion on 
revenues of $38.30 billion. 


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