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Friday, 22 February, 2002, 13:57 GMT
The secret of NTT's i-mode success
![]() NTT DoCoMo's i-mode service is hugely popular
Wap, the standard adopted across Europe for mobile-based information services, is widely regarded as a flop. Combined with the slump across the telecoms business generally, the failure of Wap - and the slow take-up of faster data services called GPRS - is scaring operators who have sunk billions into licences and equipment for the even more advanced third-generation services due in a couple of years.
The blue-skies euphoria of recent years at the industry's number one trade show, 3GSM in Cannes, has now shifted to a gritted-teeth hunt for ways of making money faster. From ridiculous to sublime But head for Japan and the picture looks very different. Close to 50 million people use data services on a daily basis, 60% of whom use the "i-mode" standard provided by the runaway market leader, NTT DoCoMo. Indeed, three-quarters of DoCoMo's 40 million customers are i-mode subscribers.
I-mode has driven DoCoMo's finances to the point where the mobile company is responsible for over 85% of its parent company's profits. From its inception three years ago, i-mode's performance has painted a picture sharply at odds with that seen in the "mobile internet" elsewhere. And its imminent arrival in Europe at long last - after numerous false starts - will finally show whether its huge success can be transplanted, and its lessons learnt by overseas peers. Under the surface While Japanese mobiles look on the surface broadly similar to their Western equivalents, their insides are very different.
But that does not mean i-mode cannot transfer elsewhere. As long as handsets can carry the software programming needed to use the service, pretty much any kind of network can bear it. Only now are handsets becoming available that will permit GSM to ape DoCoMo's success. In the past few months networks have been upgraded to carry data fast enough to make it worth the user's while. Cutting the cake The lesson that DoCoMo learnt early is the obvious one: that content and services sell. Technology does not. It is the services - picture messaging, easy direction finding, finance, games, and hundreds more - which took i-mode to critical mass and beyond.
That model stands in sharp contrast to Europe's Wap services, where getting beyond a "walled garden" of operator-sanctioned services was too complicated for the average punter. That made sure that they kept most of the money. But DoCoMo and its peers saw that a smaller slice of the cake was fine - as long as the cake just kept on growing. So everyone is happy. The user knows how much he or she is spending. The service provider gets paid. And DoCoMo sees usage and user numbers, and therefore overall revenue, spiralling skyward. Even with the world's second-biggest economy in the depths of a seemingly endless recession, DoCoMo and rivals J-Phone (part owned by the UK's Vodafone) and KDDI are still rolling out new services to widespread acclaim. Stepping up The effect is that most Japanese are now entirely at ease with seeing the mobile as a doorway to a world of data, and ready - over time - to step up to the even faster, richer third-generation services. Needless to say, that is a situation which European carriers, burdened with 3G-related debts and a public whose appetite for data was spoiled by the bad taste of Wap, view with envy. I-mode starts in Europe over the next two months, initially on Germany's E-Plus network and KPN's services in the Netherlands and Belgium. And their competitors will be keen to see whether it will finally give users a reason to get excited about data - and offer operators a ray of light. |
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