Measured start for 3G in mobile users' heaven

By PETER GRIFFIN

TOKYO - The bustling streets of Akihabara, Tokyo's technicolor electronics district, are a mobile phone buyer's Eldorado.

In towering department stores gadgets and appliances vie for attention, among them types of phones that New Zealanders may see a couple of years from now.

Taking pride of place are the third-generation (3G) phones from NTT DoCoMo, which Tokyo dwellers can now use to access the high-speed services and applications that have been hyped for years.

As well as being one of the most densely populated cities in the world, Tokyo boasts one of the highest levels of mobile phone use.

Mobile operator NTT DoCoMo has 33 million subscribers, making it the biggest mobile service provider in the world. It has a surprisingly conservative approach to the technology that the rest of the world is racing to adopt.

Finding the phones is easy - there was little bustle around the bright-red 3G displays the day I went window-shopping. But finding someone who has made the jump to 3G is more difficult, as NTT DoCoMo has sold only 11,000 handsets since starting the service on October 1.

The phones themselves are impressive, being stylish, light and feature-packed.

Two versions are on the market, one boasting videophone features, the other a standard 3G phone with screens that use organic electroluminescent (OEL) elements, which give a vibrant display and cut down on glare.

The new handsets let you access "i-mode" websites, send e-mail and download Java applications. Games for the train ride home are especially popular in Tokyo.

Phone calls take on a new dimension with the videophone model. It comes with a fingernail-sized camera built into its hinge which you rotate to face you when you make a call. Spin the camera away and you can take still digital images.

Apparently the phone can record a minute or two of video footage or take up to 70 low-resolution pictures.

From December the service will be expanded to other areas.

With 3G the data transfer rate in theory is as high as 384Kbps (kilobits per second), giving many users faster access than they would get dialling up the internet at home.

But the high-speed is countered by the service's limited network coverage.

At present it runs only within a 30km radius of Tokyo's city centre. Stray outside that circle of coverage and even voice calls are off the cards.

DoCoMo claims it will expand the service from next month to cover more of Tokyo, and extend the service to Yokohama, Nagoya and Osaka next year.

But the frenzy that usually accompanies the arrival of new gadgets has not greeted these super-fast phones, due in part to DoCoMo's conservative expectations for the technology.

According to its president, Keiji Tachikawa, the company expects 150,000 handsets to be sold by March.

An enthusiastic saleswoman at DoCoMo's showroom in Akihabara said 4000 handsets had sold on the first day they went on the market.

NTT DoCoMo expects only one in every 10 subscribers to have a 3G phone in three years.

Selling for between $US500 and $800 ($1185 to $1900), the phones are aimed at the high end of the market. Data charges are expensive.

Watching the debut of the service is Australian mobile player Hutchison, which has signalled that it aims to be a pure-3G player with the sale of its GSM customer base to rival Optus for $A43 million ($53 million).

Hutchison still has a CDMA network and 120,000 customers.

It is building a 3G network with financial backing from Telecom New Zealand.

With times difficult in the global telco industry, 3G aspirations require deep pockets.

Last week, NTT DoCoMo posted a fall of more than 50 per cent in net profit for the six months to September 30, as it faced a big writedown in the value of its investment in Dutch mobile operator KPN Mobile.

Investing in Europe is seen as a key factor in DoCoMo's boosting the use of its "i-mode" mobile internet service and the 3G technology beyond Japan.

High-tech aspirations will also have a big price tag for Hutchison, which expects to spend up to $A3 billion on its 3G service over the next five years.

It's an impressive sum, especially given that the company expects to lose $A75 million in the half-year to December 31 and will look to trim its workforce by 350 jobs.