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NTT DoCoMo slashes 3G targets – probably

FOMA at the mouth

ComputerWire: IT Industry Intelligence

NTT DoCoMo Inc said yesterday that it might not hit the 1.38 million-user target it set for its FOMA 3G network by the end of its fiscal year next March, and will probably formally revise the figure when it announces first-half figures in November.

At a Tokyo press conference reported by Bloomberg, DoCoMo's president Keiji Tachikawa said: "Given the sluggish progress so far, we have no choice but to cut our FOMA sales target."

Only six weeks ago, Tachikawa said he saw no reason to fear for the long-term future of 3G, but his confidence clearly doesn't extend to its shorter-term prospects, which are now comparing very poorly with those of alternative 2.5G and 3G networks operated by DoCoMo's competitors.

KDDI, for instance, said it sold 280,000 handsets supporting its new CDMA 1XRTT-based 3G service in its first month of operation, and said it expects the service to garner 7 million subscribers by April 2003. FOMA, which launched in October last year, had attracted just 114,500 subscribers at the end of June.

To some extent, FOMA, which is based on the W-CDMA 3G standard, has suffered from DoCoMo's long-held ambition to be the first company to begin commercial 3G services. It achieved this goal last year, but at the price of launching a service with poor national coverage, based on unproven technology, and which was not supported by handsets that could compete with existing 2G and 2.5G models in terms of either performance or price.

However, DoCoMo, whose highly successful i-mode wireless data service allows the company to retain wireless service market and thought leadership in Japan, is now said to be concentrating more intensely on raising FOMA's profile. It is on schedule to stretch 3G coverage to 90% of Japan's population by March, and by December it is expected to be offering 16 new 3G handset models, with keener pricing, and battery lives more comparable with 2G and 2.5G devices.

© ComputerWire

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