- Mr. Yoshiki Chika, Director of DDI POCKET, Inc. -

Cumulative wireless communications users have rapidly been increasing globally. However, those are expected to reach saturation in Japan, U.S.A. and European countries. Those countries are in need of new markets to offset the voice communications market's expected future weak growth. Another trend is that communications rates have been decreasing rapidly, especially for data services as the emergence of Internet, WLAN (Wireless Local Area Network), etc.

Most of the Japanese carriers are hoping for future recovery of the wireless communications ARPU through data communications service such as "i-mode," etc. This is the same situation in European countries as well; however, no carriers have succeeded in developing any data service killer applications for ARPU recovery yet.

In such circumstances, PHS could be the most preferable solution with its cost-performance balance. A cellular system is expensive though it shows high performance in wide areas while hotspot type WLAN has high data transmission speed, but a limited service area. The PHS system can provide data application services with relatively enough coverage at low network operation costs (per bit and per user) as well as low initial investment compared with a cellular system. Further, PHS handsets (Personal Station = PS) are less expensive, have lower power consumption, and are smaller than cellular phones.

As for data services, DDI POCKET launched a packet service one year ago (June 1st, 2001) and 128kbps service is available now. It can be said that this is the first high-speed, flat-rate and nationwide WLAN service in the Japanese mobile market. Cellular systems are regarded as not suitable for flat-rate (unlimited usage) service due to air capacity, network operation cost, etc. In this respect, PHS should be a few years ahead of cellular systems.

Capability of air capacity expansion is one of the packet service's advantages. Thanks to flexible CSs made by Kyocera and SANYO, air capacity can be expanded up to 4-5 times larger than the circuit switching quite easily by downloading a packet switching software to the CS. We launched 32kbps data service in 1997, 64kbps in 1999, packet (flat-rate) service in September 2001 and saw that data service MoU (Minutes of Use) grew rapidly after the launch of the packet service. At present, data users representing 15% of all subscribers are using 50% of the total network usage.

The table below shows a data downloading cost comparison between W-CDMA (Wideband CDMA; 3G service for example, NTT DoCoMo's "FOMA" in Japan) and PHS Packet service.

Data volume	PHS packet (Note 1)	W-CDMA
1 MB	7 - 44 yen (US$0.06 - 0.37)	157 yen (US$1.31)
MP3: 4MB (Note 2)	25 - 175 yen (US$0.21 - 1.46)	625 yen (US$5.21)
Movie: 10MB (Note 3)	63 - 441 yen (US$0.53 - 3.68)	1,563 yen (US$13.03)

(Note 1) Experimental statistical data are used because of the PHS's flat-rate system.
(Note 2) 4MB MP3 data corresponds to a piece of the music with 4 min duration.
(Note 3) 10MB movie data corresponds to the moving picture with 1 min duration.
(Reference Exchange Rate : US$ 1 = 120 yen)

Though 3G technical specifications are excellent, 3G service's high cost makes it difficult to develop its market and in this respect, PHS is superior to 3G for multi-media data services. Further, adaptive array antenna technology by Kyocera, SANYO and ArrayComm can enhance the air capacity/frequency efficiency up to 2-3 times higher than before. PHS has already adopted this technology two years ago. However, cellular systems haven't yet, which could be another advantage of the PHS for data services. At present, DDI POCKET is providing e-mail and web services under the brand name H" Link and the music downloading service is also available as multi-media contents (refer to the PHS MoU Group News No.38).

Handsets are still important for further development of the PHS market. High-function handsets are already available and much higher one will become available in the future. However, such handsets can be quite expensive. On the other hand, as for wireless data cards, a PCMCIA (Personal Computer Memory Card International Association) card type was launched two years ago and an even smaller CF (Compact Flash) card type is available now. Further, memory card types will also be available soon (refer to the separate article in this PHS MoU Group News). Only simple functions are required for data cards to utilize various applications by inserting it into a PDA, a watch, a digital camera etc. that have a capability of realizing the upper layer protocol. Its telemetering application to vending machine, copying machine etc. is also promising for further market growth.

As for the backbone, current ISDN is expected to be gradually replaced with an IP network due to cost benefits and it's necessary for us to have our own full IP network.

In addition to the above, speeding up of the data transmission up to 1 Mbps for example, is also necessary as the Japanese government has already permitted it and allocated an additional necessary frequency band to the carriers. DDI POCKET is now working for its standardization and if it's realized, we'll be able to become competitive with other cellular systems and WLAN business for more than 10 years.

Detailed material is available