Telecommunications

June 2007

KDDI, DoCoMo Seek Ways To Bid On Next-Gen Broadband Licenses
KDDI Corp. and NTT DoCoMo Inc. are among the companies to have begun considering alliances with other firms in light of the Communications Ministry's decision to not award licenses for next-generation wireless broadband services to established cellular phone service providers. The ministry has said that it will issue licenses to two companies, but will not grant them directly to providers already involved in third-generation services. Firms in which cell phone service providers or their group companies own stakes of more than one-third will also not be considered. Related parties had until Friday to register their views on the conditions. In its submission, KDDI said that "there is no reason to discriminate among providers" and that "applications from 3G providers should be accepted." And DoCoMo appealed to the ministry for equality in the consideration process. An official decision on the stipulations will be made next month, with license winners likely to be decided in autumn One leading contender is Willcom Inc., which specializes in personal handyphone system services. It aims to launch a next-generation PHS service that boasts speeds roughly 40 times those of current offerings. It plans to launch its service by updating current base stations and is expected to go solo in its bid for a license. Another top candidate, ADSL Internet service provider Acca Networks Co., will establish a preparatory firm for obtaining a license. It is eyeing developing cell phone services able to handle images and other large amounts of data using WiMAX, which is gaining traction as the global wireless standard. But to take such operations national, it will likely need more than 100 billion yen. So Acca Networks' biggest issue will be raising funds, since its group sales are shy of 40 billion yen. "We will consider soliciting capital from a wide range of parties without relying too much on one firm," Acca Networks Chief Executive Officer Shoji Kimura says. On the other hand, KDDI -- which also aims to launch WiMAX services -- is searching for a way to apply for a license via a company in which it owns less than one-third interest. "We could wield leadership in management even with a stake of less than one-third," KDDI President Tadashi Onodera insists. An executive at DoCoMo suggests that the firm "will first consider providing capital -- and then, if that's not possible, we would look at borrowing facilities." Both KDDI and DoCoMo are expected to continue exploring their options behind closed doors. (The Nihon Keizai Shimbun, June 16, 2007)