Subject: 2.5G Rules - OK?

From: "Brian Powell" <[email-masked]>
Date: Fri, 21 Mar 2003 17:56:31 -0000

2.5G Rules - OK?

The longevity of 2.5G was predicted in both of our incisive (and now highly-acclaimed) reports,
first published in September 2001: 
  Report 1 - "The Emerging MVNO Market, Challenges and Opportunities" (Section 6); and

  Report 2 - "MVNO Roadmap" (Section 7).
Now, there is real tangible evidence that MVNOinfo.com's prediction has become reality.

The Japanese mobile operator NTT DoCoMo recently announced that it is earning less per
user for its 3G FOMA service than it is for its 2.5G i-mode service. This was reported recently in
The German Financial Times newspaper (FT Deutschland) and makes very uncomfortable reading
for any mobile operator planning to commercially launch 3G services later this year.

FT Deutschland quoted prominent NTT DoCoMo board member Takanori Utano as saying:
"Data revenues per customer for FOMA (3G) are below those that we have with the systems of the
second generation." It appears that the main problem is the lack of applications for 3G phones,
which, in turn, is put down to the low number of subscribers to NTT DoCoMo’s 3G service (FOMA). 

It appears that a non-virtuous loop is beginning to emerge in the global mobile market. With few
3G customers to aim at, application developers are pitching their products at the much more
developed i-mode market. The knock-on effect is that with fewer attractive services to offer,
3G operators will find it hard to build the critical mass of customers they need for next
generation mobile phone systems to be viable. 

ARPU at DoCoMo’s FOMA service started out relatively high in the period from October to
December 2001, when it stood at Yen10,400 (US$77.80). This was then almost 25% more
than DoCoMo's ARPU for its i-mode customers (Yen8,500). However, the trend reversed during
2002 when the company’s ARPU from 3G customers fell to Yen 8,300 while the revenue
per i-mode user remained static.

© MVNOinfo.com March 2003, All rights reserved.

The MVNO market is one of the few areas offering great potential opportunity

in today's communications industry.

To make sure YOU don't miss out on the chance to get plugged in to this

brand new market opportunity - visit: www.mvnoinfo.com, where you

can access our highly-acclaimed reports and can also find

FREE WHITE PAPERS and a Community Section. Alternatively,

contact Brian at: [email-masked] or Katalin at: [email-masked]

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