NTT DoCoMo Inc, reversing an earlier stance, will sell a mobile phone that bridges old and new technologies after delays in introducing faster wireless service, chief technology officer Kota Kinoshita said.
DoCoMo, the world's No. 2 mobile phone company by sales, will sell the dual-band NEC Corp-manufactured phone in the next few months. DoCoMo aims to cover 97 percent of the Japanese market with faster wireless service in March 2004.
Not introducing a transition product earlier "wasn't a mistake, as we were targeting a nationwide rollout with single standard," Kinoshita said in an interview at the 3GSM World Congress in Cannes, France.
"From a perspective of risk management, we will launch a dual-mode 2G-3G phone in the spring," he said.
Consumers have shunned DoCoMo's FOMA service, the first to use so-called 3G technology allowing users to download video clips, partly because of lack of appealing handset models. The service started in October 2001. Failure to meet targets may tarnish the company's brand image, an investor said.
"Since the gap in coverage between 2G to 3G acts as a barrier to migration, we believe subscriber growth will take off once we reach 97 percent coverage," Kinoshita said.
The company has 99 percent coverage already in Tokyo.
Consumers in rural areas may be attracted to the dual-band phone because they may be more hesitant to move on to the new technology when it's available, he said. There will only be one model of the transitional phone.
DoCoMo said demand is strong for new 3G handsets from Matsushita Electric Industrial Co, which will go on sale in March, four months later than DoCoMo expected.
Matsushita Electric, Japan's second-biggest mobile phone maker, sells handsets under its Panasonic brand.
Mobile-phone makers have solved problems with phones for faster wireless service, Kinoshita said, improving standby battery life to 250 hours from 55 hours.
Prices have come down and the phones are sold for about the same as handsets for the older technology, or Y30,000 (US$250).
DoCoMo, which invested about Y1 trillion in 3G, expects to spend about the same on the so-called fourth generation, which it will roll out from 2007 to 2010.
By then the company plans to get half its revenue from data services, compared with a third now.
Earlier this month NTT DoCoMo said it may fall short of its already lowered target for subscribers to its high-speed wireless Internet cellphone service in Japan.
Company president Keiji Tachikawa said DoCoMo may not be able to meet its target of 320,000 subscribers by March 31. He blamed delays in handset deliveries for the slower-than-expected uptake.
The company signed up 152,000 customers for FOMA by the end of last year. That's less than 1 percent of DoCoMo's 43 million subscriber base.
In contrast, KDDI had a total of 4.7 million subscribers to its high-speed CDMA2000 1X service, which began last April.
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