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The launch of "wallet phones" in 12 handsets in conjunction with Japan Rail across 900 stations is a red-letter day for mobile payments as an integrated function of the phone.
And a red-letter day for i-mode is DoCoMo's intentions to launch in the Philippines, coming as it does off the back of a rash of investments aimed at grabbing a piece of Asian markets before competitors do.
Europe gets stronger in i-mode as a result of the powerful performance of O2 and its final digestion by Telefonica, although the unexpected departure of the head of KPN's mobile division is a cause for concern among some observers.
Top New Stories
1. Cellcom puts i-mode on life-support?
2. NTT parent prays for child's success
3. Telstra gets all balls in the air
For all of you that asked: Download TELSTRA's i-mode TV tune ringtone.
1. Cellcom puts i-mode on life-support?
Could this be true? A couple of reports say that Israeli i-mode partner Cellcom has "cut off funding for its i-mode services" and will instead concentrate on marketing its downloadable music content, sourced to a report in Globes Online.
i-mode services were commercially launched in September 2005 and the company hoped to have 3500,000 users by 2008, though it has reportedly fallen well short of initial targets.
Even so, if the numbers are slow, that is a mighty rapid abandonment of a major initiative and one that DoCoMo would be keen to avoid.
Cellcom's previous management worked on it for over 18 months. Now, a few months after the launch, it is evident that iMode will not take off. Timing is everything in life, and that’s true for iMode, too. Its fate was sealed the moment that Cellcom's new owners replaced the company's management. The new team, headed by CEO Amos Shapira, doesn't believe that iMode should be Cellcom's main content platform. It expresses this lack of belief in iMode by not allocating resources to it, says Globes Online.
Perhaps IDC was prescient in their report of September last year: "Cellcom Gets i-Mode, But Is It Too Late?".
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2. NTT parent prays for child's success
Although DoCoMo reported, last October, that overall revenue per 3G user, including voice, was 50% higher than for 2G - saying that revenues were strong because customers who switched to its cheaper 3G network were still spending just as much or more than they did before, particularly on extra data services - this week it reported net income in the three months ended Dec. 31 fell 69% to 131.1 billion yen from a year ago.
This fall in net income was attributed to increased marketing costs during the Christmas shopping season. Year-ago earnings at DoCoMo, 56.8% owned by NTT, were also inflated by the sale of its stake in AT&T Wireless Services (after its acquisition by SBC) -- (see more on DoCoMo's financial performance at wirelesswatch.jp).
NTT Corp., still the world's largest phone company, had a 58% drop in third-quarter profit, in large part due DoCoMo's lower result (DoCoMo contributes 70% of NTT's profit.) For the nine months to year-end NTT's net profit fell to 477.77 billion yen (US$4.03 million, euro3.34 million).
NTT said in a statement that the decline in fixed-line sales came in part on a decrease in call rates revenues and a reduction in the base monthly charges. For the fixed-line business for April-December fell 6.1% to 2.549 trillion yen (US$21.52 billion, euro17.79 billion) from 2.714 trillion yen the previous fiscal year, the company said. The number of fixed-line subscribers fell by 862,000 to 48.2 million in the third quarter, and NTT expects to lose a total of 4.04 million subscribers over the entire year.
Reports said that NTT is counting on the expansion plans of DoCoMo to revive earnings growth. DoCoMo's expansion plans are not crystal clear, except that they are certainly all about revenue beyond voice and pure data, as Senior Executive Vice-President Masayuki Hirata said recently, and Asia is a strong focus, "We're trying to grab a piece of Asian markets before competitors such as Vodafone do," says Hirata.
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3. Telstra gets all balls in the air
Following on the heels of NTT, Australian i-mode partner Telstra is expected to report a fall in first-half profit of around 12.5% this week as the company's fixed-line revenue continues to slide. Goldman Sachs JB Were analyst Christian Guerra, said "fixed-line revenue declined by about 5.1% in the second half last year and the decline in the fourth quarter was 5.3%". This is roughly in line with the pattern at NTT (above).
Meantime new chief executive Sol Trujillo, who declared in November that the company would undergo a massive overhaul in order to cut costs and grow revenue (he said the company would spend $24 billion over the next five years and cut up to 12,000 staff) is never far from the front pages. An expose in the Australian Financial Review "Who is Sol Trujillo? The AFR takes an indepth look at the new Telstra CEO. What is his track record?" was uncomplimentary to say the least. It's sweeping conclusion was that shareholders and staff fell far behind Trujillo in reaping the benefits of his previous tenures.
Telstra's unilateral announcement of a national wholesale price of $30 per month for unconditioned local loop (ULL) while the matter is being debated by the national competition watchdog caused general consternation among competitors, while a Senate committee has written to Mr Trujillo and invited him to attend Estimate Hearings which he has politely declined, and a grand release of a long awaited "operational separation plan" also received a frosty reception.
It's a staggering pace at which Trujillo is operating, and somewhere in all this we hope that i-mode is getting a good hearing. The wireless side is feeling the heat with former head honcho Graham Gordon (General Manager, Wireless and Mobility) being given new responsibilities that we hear apparently give him little pleasure, and various mobile projects having their contracts terminated - some being signed up one week and then canceled the next. It's a time of massive change for Telstra.
4. Vitelcom roll out i-mode UMTS handset
Qualcomm and Vitelcom announced that their i-mode G600i mobile handset is commercially available in Spain from Telefonica Moviles.
The branding seems to be a Grundig, resulting from the agreement in January 2005 between Grundig and Vitelcom. At the time Carlos Carrero, President of Vitelcom said "The license agreement with Grundig is a further significant step in the growth of Vitelcom. Grundig is a well-recognized brand in the markets where we operate and we believe that the brand awareness of Grundig will allow us to enter into other important target markets. We initially plan to release four new mobile phone models ...these four new models designed for the European market include two i-mode enabled products and the launch of our first UMTS product."
The new handset uses Qualcomm's Mobile Station Modem (MSM6250), which supports W-CDMA, GPRS and GSM standards. "Vitelcom is excited to provide one of the first UMTS i-mode phones to Telefonica Moviles," Carlos Carrero, Vitelcom's CEO, said in a statement.
This is good news for Vitelcom, and for subscribers because Vitelcom is a driving force in producing lower cost i-mode handsets across the range. Getting this into the market will help boost the market size.
5. Mobile television to disappoint - Deloitte
Noticed on The 3G Portal that Deloitte's Technology, Media & Telecommunications (TMT) industry group predicts that, in 2006, "search will displace email as the most used digital application, girls will hit the video games, and subscription radio will soar. Subscription radio 2.0 -- radio will follow television as its business model evolves from being advertising-dominated to subscription-dominated, providing added flexibility for customers and new opportunities for providers".
Part of the report supports the direction that DoCoMo is going, to raise new sources of income. It's a trend they have been following for some time but not widely noted:
Connectivity inside everything -- the telecom industry will capitalize on maturing machine-generated communications to build connectivity inside machines and devices, resulting in remote process monitoring, asset tracking, traffic flow monitoring and more.
This points to the El Dorado for RFID and more intelligent next-generation "RFID" devices and their systems. But surely this wil not amount to any significant business in 2006?
Deloitte is not optimistic about mobile television - "Mobile television disappoints -- while it will be promoted as the next big thing, and tens of millions of promotional dollars will be spent, consumer acceptance will lag".
In my opinion mobile television will generate far more revenue in 2006 than "connectivity inside everything" - we'll see.
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