i-mode shows the way...

…Content Driving 3G

i-mode is growing at a break-neck speed of forty to fifty thousand new subscribers every day.

Highlights:

DoCoMo’s i-mode has proven to be Japan’s hottest new consumer product since the Walkman. It now gets ready to make mobile multimedia a global success... using 3G.

Three years ago when Keji Tachikawa, the president and CEO of NTT DoCoMo took over as its No. 2, little did he realize that he was about to create one of the most valuable mobile phone companies in the world. With a market capitalization of US$ 225 billion at the end of 2000, it is even way ahead of its own parent NTT.

DoCoMo launched "i-mode"—the mobile Internet service—on 22 February1999. It took 6 months to acquire the first one million subscribers. Then it started to add 100,000 subscribers a week, reaching five million subscribers in March 2000. It is expected to reach 20 million by March 2001, growing at a break-neck speed of forty to fifty thousand new subscribers every day.

The i-mode services include voice calls, e-mail and accessing web sites. DoCoMo provides a gateway server—a proxy server with no conversion—to allow access to the Internet using protocols based on HTML/HTTP. It’s HTML browser connects to the Internet through a 9.6 Kbps PDC-P packet-switched network (like GPRS), while normal voice traffic is carried over the PDC voice network (like GSM networks). The packet network not only allows faster service but also lower costs for the user as the user can pay by packets of data, rather than the time online. Currently, one packet (128 bytes of data) is charged at a rate of Yen 0.3 (approximately US 0.3 cents).

In October 2000, DoCoMo had 656 application alliance partner companies to offer 1,140 sites through i-mode. "Voluntary i-mode web sites" are also increasing by about 100 per day. Though these sites have no connection to NTT DoCoMo, their increase means more content for the user and therefore more users joining the service. More companies are also using i-mode for their corporate Intranets. There are over 27,000 Internet web sites, over 300 search engines and various Intranets. A wide variety of content fulfils almost every need.

The above picture illustrates the feedback loop generated with the increasing number of sites and the subscribers. As the number of subscribers’ increase, the more are the opportunities seen by content providers who want to provide more content. And as content increases, more users want to join the service to benefit from such information, establishing the working of positive feedback process. At the start of the service, it had only sixty seven application alliance partners, but now it has close to seven hundred and the users are increasing at about 1.5 million per month.

The Internet browser has made the cellular phone the best access tool in the consumer market today. i-mode is an attractive tool especially for companies targeting the consumer market: for instance, to deliver commercial information such as product advertisements. i-mode is useful not only in the consumer market but also as a personal tool within the company, with anytime, anywhere reach.

i-mode is now being used by the corporates i.e. in the Intranet. Using HTML, i-mode becomes a remote access tool for the Intranet. It has already launched over fifty Intranet softwares for i-mode in Japan, including the software to convert from Lotus Notes to i-mode. One can not only read e-mails through i-mode, but also check the inventory, price lists, employee schedule, etc. One can also do market research in real time—the questionnaire is put on the company Intranet web sites and the researcher sends data through i-mode from outside, for colleagues to access the information on the Intranet.

This service is especially attractive for small and medium sized enterprises (SME) as it is cost effective and reduces the investment in Intranet server/software hosting and the number of PCs, particularly for the mobile sales force that would instead use their mobiles.

 Feedback Loop Process: Pushing Growth

i-mode’s strategy development has tried to reflect the development of the Internet including employment of Internet standards. When i-mode was first launched, e-mail and simple homepages were offered, just like the first generation of the Internet/www. Later, just like the Internet, companies began using i-mode in the Intranet, with the employees accessing the Intranet via their mobile phones.

The next development is to put Java and SSL, which gives end-to-end security to content providers (especially financial institutions), onto the i-mode phone. With these technologies, users will be able to download/install applications (say, games) from the network on to their phones. This will allow content providers to provide even more attractive content. They can also download an application to act as an agent, to be able to automatically update information.

3G for Multimedia Content

Nobody understood the power of content better than Keji, who now aims to transform DoCoMo into a global multimedia company and is launching DoCoMo’s 3rd Generation W-CDMA based (IMT-2000) network in May 2001 achieving Mobile data speeds of upto 384 Kbps (2 Mbps when stationary) as against 9.6 Kbps of GSM/PDC-P. That is atleast a year ahead of 3G networks elsewhere. It will be called FOMA—"Freedom of Mobile Multimedia Access"—aiming to support multimedia content and transform cellular terminals into powerful interactive tools. The i-mode’s content, including video and music, will become even richer. DoCoMo has even signed an alliance with AOL, which is also aiming to be a broadband multimedia leader. DoCoMo has also spent US$ 16 billion in stakes in mobile companies in Europe, America and Asia, including a sixteen percent stake in AT&T Wireless to move towards its global dream.

As the hyped expectations from 3G technology have seen the fortunes of telecom companies soaring and eroding by billions of dollars, it becomes all the more important that the market expectations are lived up to—right from the beginning. The right content portfolio can meet and satiate those expectations!

Among the hot hi-speed applications for 3G are: wireless postcard/videomail (including hand written messages), music download, m-commerce, network games, video-conferencing, car navigation, location based services, medical telemetry, calendar synchronisation, corporate LAN access, etc.

When one is mobile, hi-speed Internet/video access on PC/TV may not be easy. That’s why Ramdin Chacha would like to watch his favorite movie on "mobile video" using 3G net. Also a cricket or soccer fan will do that by just a flick of a button on his 3G mobile. Content is the door to the customer heart: 3G Speed would be the key!