Telecommunications

January 2002

The Telecommunications Ministry will probably ask the regional telephone operators of　Nippon Telegraph and Telephone Corp. (NTT) to implement a 10% cut in access charges new common carriers pay for using their phone networks. A new model to calculate access charges, formulated by a study panel of the Public Management, Home Affairs, Posts and Telecommunications Ministry, adopts new criteria to calculate costs, such as a longer durability period for facilities. Under the model, access charges would be 4.13 Yen for three minutes, for telecom services offered by new common carriers to homes via local switching equipment of NTT East Corp. and NTT Wes Corp., down from the 4.50 Yen charge that comes into effect in fiscal 2002. The ministry will urge NTT East and NTT West to cut access charges by 10% after the Telecommunications council endorsed the calculation model at a meeting in March. It hopes to bring in the reduced charges in fiscal 2002. However, it is uncertain whether lower access charges would immediately prompt new common carriers such as KDDI Corp. and Japan Telecom Co. to cut their phone rates as intense price cutting competition has weakened their financial bases. NTT East and NTT West are strongly opposed to a cut in access charge, as it would result in a sharp reduction in earnings. In July 2000, Tokyo and Washington agreed to a 3-year cut of 22.5% in access charges after the U.S. complained about NTT's high access charges. The two governments also agreed to review the calculation method within two years. (January 31, the Nihon Keizai Shimbun, the Japan Times)

The government will use jet-landing frequencies for advanced wireless LAN. The Ministry of Public Management, Home Affairs, Posts and Telecommunications plans to reassign frequencies allocated to guide airplanes at airports to next-generation wireless LAN (local area network) systems. As a provisional measure, the ministry plans to assign frequencies of between 5.030 and 5.091GHz, which have been allocated for use in automatic landing systems for airplanes and are currently open, since there are no plans over the next five years to build new airports that require such landing systems. Next-generation wireless LAN systems have a transmission speed of 54Mbps, about seven times faster than ADSL (asymmetrical digital subscriber line) networks. The systems are expected to spread to restaurants and other places where people gather, including outdoor locations, where high-speed Internet connection services are accessible. Originally, the ministry had planned to use frequencies of between 4.9 and 5.0GHz for wireless LAN systems. Since these frequencies are currently used by phone companies for wireless backbone networks, the ministry has decided that it will take a long time for the firms to switch to other frequencies. (January 28, the Nihon Keizai Shimbun)

Mobile Internet Services Inc. (MIS) will begin a wireless local-area-network service in Tokyo on April 1 to provide users of personal computers or personal digital assistants with mobile high-speed Internet access. The company plans to offer the low-cost wireless services to challenge NTT DoCoMo Inc. An exclusive wireless LAN service became available in public areas of a building complex in Tokyo's Minato Ward in mid-January in a test-run of the service. Inserting a special card into personal computers accesses the broadband service of up to 11 megabits per second. NTT DoCoMo has invested 1 trillion Yen to develop its third-generation service, "FOMA." By contrast, MIS appears nimble and creative. The new firm can install a toolbox-sized base station for its wireless LAN service at an outside location for 200,000 Yen and indoors for only 50,000 Yen. Each base station covers an area 100m in radius. The company will offer commercial wireless LAN services on April 1 with 500 base stations in Tokyo, and plans to boost the number to 5,000 by year-end at an estimated cost of about 1 billion Yen. The firm would provide the new service at 2,000-3,000 Yen a month. Many people in the industry believed that wireless LAN services would only become common in hotels, shops, train stations, airports and other public areas. The new service from MIS, however, could have a considerable impact on the industry. Providing high-speed Internet access while users are roaming between base stations, the MIS-style wireless LAN network may offer competition to mobile phone operators in future. Many senior figures in the NTT group believe that wireless LAN companies will become more formidable competitors than Vodafone. The technical potential of wireless LAN does not necessarily guarantee its profitability. Many fledgling communications firms are hesitant to take the risk of offering services similar to those being provided by MIS. NTT group and fixed-lined phone companies are preparing to provide their own wireless LAN services with a view to making inroads on the mobile-communications market. (January 28, the Nikkei Business Daily)

DDI Pocket Inc. has announced it will start a flat-rate data communication service at a maximum transmission speed of 128 kbps using PHS phones on March 26. It will provide the service to the users of AirH" (pronounced air edge), its flat-rate continuous connection service at a maximum transmission speed of 32 kbps, as an additional service named "Option 128." The monthly fee for this service is 3,500 yen. Users can obtain a 128-kbps continuous connection service for a monthly fee of 9,300 yen, which includes a monthly fee of 5,800 yen for a continuous connection. (132.63 yen = US$1) Option 128 binds up four packet communication lines used for the continuous communication service, which has a maximum transmission speed of 32 kbps for downstream and 17 kbps for upstream, and increases the respective speeds to 128 kbps and 68 kbps. Option 128 will cover almost all of Japan. It can be connected to PRIN , DDI Pocket's Internet connection service, right from the start. DDI Pocket is negotiating with several Internet service providers for possible alliances. In advance of the launch of Option 128, Honda Electron Co., Ltd. will on introduce on Jan. 25 the "AH-G10 ," a PC card-type PHS supporting both 32-kbps and 128-kbps transmission speeds. (January 23, 2002, Nikkei Communications)

Further to the completion of relevant procedures, a Mutual Recognition Agreement (MRA) between the EU and Japan covering radio and telecommunication equipment, electrical products, Good Manufacturing Practice (GMP) for medicinal products and Good Laboratory Practice (GLP) for chemicals entered into force on 1 January 2002. The Agreement will smooth EU-Japan trade by providing for the reciprocal acceptance of testing, certification and approval of products by the EU and Japan. As a result, products can be certified by recognised bodies in the EU to Japanese requirements, then sold in Japan without having to undergo any further approval procedures. The MRA will cut both the costs and the time associated with obtaining product approvals. The MRA will cover EUR 2.5 billion-worth of EU-Japan trade and could result in savings of at least EUR20 million per year. For additional information, please visit: http://europa.eu.int/comm/trade/bilateral/japan/japan1.htm

Qualcomm Inc. started offering for free, a Japanese version of BREW Software Development Kit (SDK), a tool to develop software applications for cellular phone handsets. Binary runtime environment for wireless (BREW) is an application platform that runs on the firm's wireless communications chip, the MSM Series. Applications developed with the BREW SDK will operate on a cellular phone handset equipped with BREW and MSM. In Japan, most of the cdmaOne cellular phone handsets of the KDDI group employ MSM. KDDI Corp. will release BREW-equipped cdmaOne and cdma2000 mobile phone devices in the spring of 2002. The telecom carrier also plans to launch a service in which users can download applications developed with BREW SDK on their portable phone handsets by the end of the year. BREW SDL is available on a BREW Web site . The kit can run on Windows NT4.0 and 2000. To develop applications, an environment to develop in Microsoft Corp.'s C or C++ will be needed. Various application software will be available in the future. Qualcomm Japan Inc., the firm's Japanese subsidiary, expects 100 to 150 Japanese companies will use the Japanese version. With BREW SDK, users will be able to develop application software that makes use of various MSM capabilities. They can, for example, develop mailers, browsers and positioning software. The kit is faster than Java programs such as i-appli from NTT DoCoMo Inc., and can develop programs that are more deeply integrated into the system. BREW SDK uses ATOK from Justsystem Corp., an input method for Japanese language, allowing application developers to have more efficient development when inputting Japanese sentences, including messages, displayed on the screen. (January 10, 2002, Nikkei Communications)

Japan will be able to create 1.85 million jobs in the IT sector by 2005, if it achieves all the goals set under the government's "e-Japan" initiative for promoting the Internet and other technology, according to the Ministry of Telecommunications. A ministry-appointed research panel on the economy of telecommunications in Japan calculated the figure. The panel of representatives from academe and industry analyzed the economic effects assuming Japan achieves the goals set by the government in its "e-Japan" initiative. These goals include superhigh-speed Internet access, such as that provided by fiber optics, in 10 million households, and high-speed Internet access, such as that provided by DSL (digital subscriber line) technology, in 30 million households by 2005. The research panel forecasts activity in line installation, as well as the development and sale of equipment and software compatible with high-speed communications. (January 9, the Nihon Keizai Shimbun)

Compaq Computer KK, KDDI Corp., Japanese data center company CSK Network Systems Corp., and Korean software developer Witnet Co., Ltd. have formed a joint business alliance for a wireless remote operating system for mobile devices. The four companies will build a system that enables PDA users to operate PCs in offices using a wireless network. They will supply the "enterprise model," which offers a system integrating service, and an "ASP model" for ASP service. Witnet will supply the software program, "Mobilick," for remote operation, Compaq will provide its PDA "iPAQ Pocket PC," and KDDI its wireless communications PC card, "Rapira Card." Compaq will offer the service for system construction, and CSK Network Systems the ASP service. KDDI's 64Kbps packet communications network will be used as the communications infrastructure. Mobilick executes applications on a PC and transmits the screen results to a PDA. The PDA displays the screen results and the user operates the PC while scrolling the PDA screen. Its benefit is that a user can operate a PDA as if operating a PC. There is little software that enables a PDA to operate PCs as this does. They will start offering the enterprise model from late January 2002. It is estimated to cost 30-35 million yen (130.73 yen = US$1), including expenses for PDA devices and communication cards, with about 500 users. The ASP model will be launched in late March 2002. Monthly charges are estimated at 2,000-3,000 yen, including communication charges. (January 4, 2002, Nikkei Computer)

In Japan, 2001 appeared to be a year of marked expansion of broadband users who can connect to the Internet at speeds faster than 100-300Kbps. According to the summary value the Ministry of Public Management, Home Affairs, Posts and Telecommunications released, the total subscribers of digital subscriber line (DSL) and CATV Internet passed the 2-million mark at the end of October. This means that the number of subscribers tripled in the 10 months since the end of 2000, when the total of the two was approximately 630,000. This momentum does not seem to be ready to stop for a while. According to a forecast by Nomura Research Institute Ltd. (NRI), it will be about 3.5 million at the end of March 2002, and will pass the 10-million mark around March 2004. Naturally, the percentage of broadband users in Japan will continue to increase. (January 3, 2002, Nikkei Communications)