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Communications and Information network Association of Japan

9TH WEF. New Technology in the Telecommunications Services in Japan. September 1, 2003. Communications and Information network Association of Japan. Subscribers to Japan’s Cellular Phones. Source: Telecommunications Carriers Association (TCA). Outline of i-mode. i-mode Business Model.

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Communications and Information network Association of Japan

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  1. 9TH WEF New Technology in the Telecommunications Services in Japan September 1, 2003 Communications and Information network Association of Japan

  2. Subscribers to Japan’s Cellular Phones Source: Telecommunications Carriers Association (TCA)

  3. Outline of i-mode i-mode Business Model i-mode success factors 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. Contents Provider Information Charges Information Commission fee (9% of Information charges) Information Charges NTT DoCoMo i-mode users Packet Communication Charges

  4. Growth of Contents Business of i-mode Growth of contents business Breakdown of packets used (100 mil yen) Database Mail 15% Transaction Web access 85% Information Entertainment Left axis Right axis

  5. NTT DoCoMo Revenue/ARPU Analysis (consolidated, US. accounting based) 1$=120\ ARPU: Average Revenue Per Unit

  6. Commercialization Plan of 3G Services Carriers No. of 3G subscribers as of July, 2003 2001 2002 2003 Population Coverage W-CDMA May Oct Dec Mar Autumn NTT DoCoMo 97% & more Introductory service 95% 87% Other major cities (659K) Tokyo Area Osaka, Nagoya (152K, end of 2002) Aug Dec Summer J-Phone 95% (66K) Postponed Osaka, Nagoya Tokyo Area cdma2000 Autumn Tokyo Area CDMA2000 1X 2GHz Dec spring KDDI au 1X EV-DO Postponed (9,156K) 90% CDMA2000 1X 800MHz

  7. 110 to 310 thousand pixels in 2002 1 million pixels in spring 2003 2 million pixels in fall 2003 Elements Leading to Widespread Popularity of DoCoMo’s 3G Background 1. Expansion of service area (% of population covered) 2. Explosive popularity of camera-equipped cellular phones • Two-thirds of cell phones shipped within Japan are camera- equipped models. • Capacity of digital camera function has moved into mega-pixel range, and clarity of LCD screen has increased. • Popularity of mailing high-quality still images and long video images via e-mail. 3G’s high-speed data transmission function is its true worth

  8. Improvement of 3G Handsets Performance

  9. Use of Cellular Phones (based on study by CIAJ) Study conducted from March through April, 2003 on 600 people (of both sexes and covering every generation)

  10. DoCoMo’s Transition Schedule From 3.0G to 3.5G 1. Higher transmission speed Now 384kbps end of 2004 14.4Mbps max (provide HSDPA functions) 2. Complete conversion to IP of cellular phone networks 2005 or later ALL IP networks Now Voice:circuit switching networkData: packet switching network Greatly reduce construction and operating costs for adjustments to increase in data traffic

  11. User environment Expansion resulting from Systems Beyond IMT-2000 (4G) cellular type 4G system IMT-2000 Enhanced (3G) IMT-2000 On-site, Campus/ Medium-speed Public wireless LAN (3.5G) Indoors/ Walking 1M 10M 100M 1G Diagram of 4G (Systems Beyond IMT-2000) Compiled by ITU-R (based on Japanese proposal) 4G will encompass existing communication systems such as 3G and wireless LAN Wide-area mobility/ High-speed expansion wireless LAN, Bluetoogh high-speed wireless access Data speed （bit/sec.） Seamless interconnectivity where users don’t notice transition from one network/system to another. Local networks using wireless LAN, Bluetooth, etc. Terrestrial digital broadcasting/BS digital broadcasting

  12. Subscribers to Japan’s Broadband Services Source: Ministry of Public Management, Home Affairs, Posts and Telecommunications

  13. Higher Speeds and Price Wars Among Internet Access Services

  14. International Tariff Comparison of Always-on ADSL Services （Yen/month） (Max speed of downlink) 1.5M 8M 8M 768k 1.5M 512k 500k 768k 512k 1.5M Upper Part:ISP access fee Lower Part:communications fee 5,050 4,984 4,850 4,613 Source: Ministry of Public Management, Home Affairs, Posts and Telecommunications

  15. Virtually unlimited number of addresses • IPv4: Total 4.3B IPv6:3.4X1028 per capita. • Hierarchical Addressing • Efficient network administration • Security function is standard • Authentication in EC etc., secured traffic • Framework for QoS guarantee (flow label): • Stream data (voice, video) • Easy configuration by Plug&Play • IP enabled information appliance • Multicasting is standard • one-to-many, conversion of broadcasting and communications • Interconnection with Mobile Network • Seamless interworking between fixed network and mobile network via MobileIP Features of IPv6

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