First of all, I want to welcome all of you to this beautiful place of Hainan Island and the beautiful weather we are having today. This year of 2005 is the ten-year anniversary of the launching of PHS in Japan by NTT and DDI-Pocket. From only a few million subscribers in Japan just a few years ago, PHS has now grown almost 20 times to 75 millions subscribers and some say it will be 100 million by the end of this year.

What is PHS? Is it a high-speed packet data product that is getting a lot of attention in Japan? Is it a system in Thailand that integrates with custom telephone service through intelligent network architecture? Is it a single handy phone that provides both PHS and GSM services now gaining popularity in Taiwan? Is it a low cost mass-market mobile service for tens of millions of Chinese who might otherwise not have a mobile phone?
What is PHS? Actually today, it is all of these and probably more as it could change again in India or Vietnam or South America or Africa.

Who sets the PHS standard? Is it ARIB in Japan? Is it the PHS MoU? Is it the vendors in Japan and China? UTStarcom? DDI-Pocket? ZTE? Kyocera? Sanyo? Who really creates the standard?

Is PHS a healthy controlled and evolving standard where vendors, operators and customers can all benefit from the development, manufacture and sale of the technology or is there no one in charge?

As we look ahead to the next 10 years, to the year 2015, how will PHS evolve? Will there be many different systems under the name of PHS; or will there be a unified standard system with interoperability and roaming for all?

What do we want to be when we grow up? For some understanding, I decided to look at history. But I also understand that we are in a roaring telecom world today - different from the world of the 20th century. Today - society, the economy, the Internet, and the mobility of people are all evolving at a frightening speed.

So let’s look what happened in the 20th century, In the first quarter of the century, there was a lot of development and trials with wireless communications. Some people said that is was chaos. There was a lot of confusion and frequency interference.

In the second quarter of the century, there was the beginning of regulation with the licensing of operators and stations and the assignment of spectrum. In the third quarter of the century, national standards emerged in the analog systems. In the US there was AMPS; in the United Kingdom there was TACS. In Germany there was C-Netz. In France was Radiocom 2000. In Italy, there was a system called RTMS. Everyone had a standard. Today all of them are dead or dying. In the fourth quarter of the last century, multinational standards began to remerge. The first was by the Nordic countries, Demark, Sweden, Finland and Norway, when they created the NMT 450 analog system (and today there is both a GSM version and a CDMA version of that NMT 450 system). Tired of all of this confusion - the GSM MoU was signed by European countries in 1987 and that led to the GSM standard. I am told that there are about 1.7 billion users of various global standards in the world today. That number seems to change with whom you talk to. But, 3 out of 4 of those are using GSM. And Of that large GSM population, 3 out of 4 are outside of Europe.

Of course other standards have been developed during this time, such as PDC in Japan. IDEN a technology from Motorola that is used by Nextel; and CDMA that was developed by QUALCOMM. These and PHS and the NMT standard comprise the other 25 percent of the world that is not GSM. And CDMA is half of that 25 percent. Other standards have died. Indeed, one can say that today there are 3 growing global wireless standards in the world, GSM, CDMA and PHS. There is an old marketing rule that says that in an open market there tends to evolve three major competitors and that is what appears be happening here.

What seems to be in common among these 3 standards? First, they were adopted on an international standards basis or by a multinational committee. Second, they received support of a variety of major vendors on both the infrastructure side as well as the handy phone side which gave the operators choices. Third they achieved interoperability such that a consumer has comfort the he can roam and his handy phone will work with the same systems in other countries. Fourth, these multiple vendors provided price competition.

With PHS, which is in China, Taiwan and elsewhere, but with the major national vendors in Japan – it is possible that China, India, or Brazil may implement a local national PHS standard to ensure that their local needs are met; and to enable local vendors. It could signal the beginning of the end of the PHS standard. I don’t want to paint an alarming picture, but I want to raise this as an issue for the members of the PHS MoU to consider. As we begin our second decade, do we let the PHS standard become modified by various national vanities or vendors or even operators? Or do we consider that the vitality and the growth of PHS will be found in unity through adoption of a single standard on a multinational basis?

Support from a variety of vendors to serve the world PHS Community on a competitive basis and the interoperability of user terminals on any PHS system in any country is necessary. Now is the time to learn from other’s mistakes before it is too late. A multinational standard supported by vendors and operators will work and will be able to benefit everyone.

So let’s bring it back to Hainan. Several years ago, I was on the Board of Directors of a company named Star Digitel. My partners were the People’s Liberation Army and my offices were in Guangzhou and Hong Kong. We were happy when we visited Hainan and rolled out the first AMPS service in Hainan; and I remember visiting our first sales office here in Haikou. I am not sure that AMPS is still here in Hainan today. Does anybody know? But guess what is here - GSM, CDMA, and PHS. In ten years, will we find that PHS will be gone? Or will we have a robust system because of the rules put into place by the PHS MoU ensuring that PHS international standard matures? Will we continue to be one of the 3 international wireless systems or will PHS be replaced by something else? The answer to that is with you - the members of the PHS MoU. As we start the second decade of the PHS MoU, let’s start discussing where we want to go and how we plan to get there together. And of course how each of us can help.