NTT DoCoMo expects 3G users will spend more

NTT DoCoMo President Keiji Tachikawa said he expects users of the company's new Foma 3G (third-generation) cellular service will spend at least 20 percent more per month than users of its second-generation network.

"Foma provides a faster service so naturally we expect that there will be more use than on the conventional 2G service," Tachikawa said at a regular press conference Thursday. "Our current ARPU (average revenue per user) is about 8,000 yen (US$68) per month, but Foma users are expected to have an ARPU of more than 10,000 yen."

Increasing revenue per subscriber is becoming more and more important for NTT DoCoMo as growth in I-mode usage, as well as total cell phone market growth, begins to slow.

"The cellular phone market is growing at a pace faster than we expected but, unfortunately, I-mode is not driving the business as much as last year so the pace of growth has slowed down somewhat," said Tachikawa.

"Looking at the estimate for the first six months, accumulated subscriber growth is showing an increase of 17 percent over the previous year. This is more than we expected. In terms of net growth, the market has been expanding at a pace of 10 million (users) each year for the last several years but I don't think that will be the case for this fiscal year. Looking at the situation for the first six months, I think the market is growing at a pace of 90 percent of last fiscal year's growth and perhaps the entire year will be slightly below 90 percent."

NTT DoCoMo plans to launch its 3G service, based on W-CDMA (Wideband Code Division Multiple Access) on a full commercial basis from Monday. After postponing plans for a full commercial launch at the end of May, the company has been running a trial service with around 5,000 users and has ironed out numerous bugs and glitches from both the network and handsets.

From Monday three terminals will go on sale -- a standard handset with wireless Internet capability, a more advanced model with built-in video camera and video conferencing capability, and a PC Card data modem terminal for notebook computers. The company is planning to have 20,000 of the standard handsets in shops on Monday and a few thousand each of the video phone and data card, said Tachikawa.

Despite the delay in the commercial launch, Tachikawa and DoCoMo remain committed to achieving a fiscal year subscriber goal announced before the delay was decided upon.

"We are confident we can achieve our goal to get 150,000 users by the end of this (financial) year," said Tachikawa.

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