Mr. Satoshi Fujii
Global Business Group
Willcom Inc.

Willcom succeeded in improving the image of the PHS by changing the composition of the major shareholders. Since changing the name of the company in February of 2005, Willcom has introduced many new services to the market. Pure growth rate (the number of new subscribers each month divided by the total number of subscribers from the previous month) compared to the other companies is the best in the industry since April 2005. This means that Willcom is currently the mobile service provider that is drawing the most attention.

In particular, since the start of the unlimited voice calling service in May 2005, the number of subscribers skyrocketed, marking a pure growth of one million subscribers in roughly one year. In Japan, 3G service was introduced in 2001. The service has spread sufficiently; PHS still continues to gain new subscribers in this market. This proves that the technology of PHS matches that of 3G.

(Major services and products provided last year)

• Unlimited calling plan
• Air Edge (8x)
• Nanocell System
• W-SIM, WILLCOM SIM STYLE

W-SIM is a wireless module, a SIM card with wireless capabilities. It can be operated as a PHS terminal when combined with a handset called a Jacket.

Willcom not only plans to expand the current market, but also is working to open up new markets. To gain new ground in an already mature communication market in Japan, it was necessary to use the unique characteristics of PHS and realize something only PHS can provide to the subscribers.

There are various demands in such new markets. It is very difficult to fulfill that need by using the existing business model which was to sell as many cell phones of the same model as possible. It is necessary to succeed in the cell phone business by filling the demand of providing many varieties of products in small quantities.

To fulfill this demand, Willcom created a small module that consolidated the wireless unit, which had a big development risk. By making this a unit for general-purpose use, the risk for developing PHS terminals was lessened, creating a business model with a variety of products in small quantities.

From a user's point of view, the merit of having the W-SIM is that users can freely exchange their phones. Instead of going through the usual complicated steps, just by switching the W-SIM, the user can change the type of the phone depending on how she or he is feeling that day.

Currently, Willcom has various jackets for simple voice service, data model with USB interface, and also a PDA type jacket with Windows mobile.

The Willcom Core Module Forum was established with vendors and service providers who endorsed this W-SIM concept. The forum standardizes W-SIM technical standards, partipates in promotional activities and provides information to exchange among users. Because of this standardized interface, companies can freely create businesses based on their own ideas. We can expect value-added services using PHS will be provided at a very fast pace. As a result, the user's life will be more fulfilling, the business of the vendor will expand, and users in the network business will increase. We can see that a positive cycle will come of all this. Willcom has already received ideas from companies in various industries/fields.

W-SIM is planning to provide value-added services as it evolves.