November 16, 2001 / News Archives
Partnerships Underscore 3G Cooperation Trend
By Clint Boulton
Tokyo's NTT DoCoMo Inc. (NYSE:NTT) and IBM Lotus Software (NYSE:IBM) Thursday said they would work together to see if it is possible to forge and sell mobile multimedia business solutions together. And they actually signed a memorandum of understanding, making their brainstorming process official.
NTT DoCoMo and IBM Lotus Software said they want to hash out whether or not they can develop solutions to run business applications on NTT DoCoMo's mobile networks, including the Freedom Of Mobile multimedia Access (FOMA) 3G mobile network DoCoMo is best known for. Also on tap are possible ways to bundle mobile technology in business applications.
With the arrangement, NTT DoCoMo hopes to push the development of FOMA for the corporate market, which is where many analysts see the success of next-generation wireless communications coming to fruition. Any solution born of the DoCoMo/Lotus agreement will be co-branded.
NTT DoCoMo's deal with IBM seems to be the Japanese firm's only such partnership with a major tech player not working frantically on 3G this week. Just yesterday, NTT agreed to work with Finnish rival Nokia (NYSE:NOK) to improve open mobile service middleware, which both firms feel is a fundamental enabler to the global deployment of mobile services. Specifically, NTT DoCoMo and Nokia pledged to promote mobile architecture for WCDMA-based 3G services, in areas such as browsing and messaging. WCDMA is QUALCOMM's CDMA-fostered standard taken to the next, wideband level, with the capacity to speed voice, video, data and image transmission to 2Mbps.
But the floodgates for such deals were flung open this past Monday at Comdex 2001 in Las Vegas, when just about any telco that counts put its two cents in the jar to pledge its allegiance to work on bettering 3G standards. The firms, which included other major players such as AT&T Wireless and Cingular Wireless, said they wanted to create "interoperable mobile Internet access and visual contents downloading services worldwide, utilizing the GSM/GPRS evolution and coming 3G mobile telecommunications networks adopting WCDMA technology."
Some analysts may take this as a sign of the telcos' desire to get the slow 3G ball rolling faster. Interestingly, NTT DoCoMo, with FOMA, did that October 1, becoming the first official commercial provider of 3G services. But the drivers behind this theory indicated as much with their issued statements. Said Dr. Keiji Tachikawa, chief executive officer of NTT DoCoMo about his firm's deal with Nokia:
"In order to accelerate the introduction of mobile internet access, mobile visual communications and other services for 3G networks, NTT DoCoMo is eager to cooperate with other key players in the mobile communications industry to elaborate specific technical specifications based on a standardized mobile architecture. This collaboration with Nokia is one of those activities to achieve that goal. We sincerely hope that our cooperation with Nokia will eventually gain strong worldwide supports that help us contribute to boost global demands for mobile multimedia."
To be sure, market research firms, such as Yankee Group, have parsed pending 3G services and the trials and tribulations they face to no end. The Boston-based firm estimated that global capital expenditure (capex) for wireless mobile network infrastructure will increase from $99.4 billion in 2001 to a maximum of $120.2 billion in 2004, with the lion's share of expenditure going for GSM, GPRS, and WCDMA development.
While this shows surefire market opportunities for infrastructure providers over the next few years, the Yankee Group also fretted about pricing models for the GPRS standard, popular in Europe.
"In most cases operators are still assessing market requirements through service trials, so strategies are still being refined, but the favored model at present is to charge by the amount of data consumed," said Farid Yunus, senior analyst for the Yankee Group's Wireless/Mobile Europe research and consulting practice. "This has been determined for the most part by legacy billing platforms and capabilities," he acknowledged, "but given the diversity and range of future data applications, this approach will prove inadequate both in the long term and in stimulating demand right now. While we understand the need for operators to recoup 2.5/3G network and service development costs as soon as possible, without lower and more flexible pricing we seriously doubt that consumers will be enthused and that a mass market will be created."
NTT also these week secured attention for a newly-announced 3G video content service, called "I-motion." The offering features video-on-demand, (VoD) such as movie trailers, news highlights and music files, to 3G phone service users.
And there are a lot of those; NTT's cellular phone subscribers numbered 38 million as of this past August.
