NTT DoCoMo Hits the Brakes on I-mode

TOKYO (04/21/2000) - NTT DoCoMo Inc. yesterday applied the brakes on its cellular Internet bullet train, announcing plans to halve shipments of handsets, halt advertising of the service and repay fees to millions of customers after a series of embarrassing service outages.

I-mode, which allows users of specially equipped handsets to access various Internet services and send and receive e-mail, was launched in Japan in February 1999 and last week passed the 6 million user mark. In recent months, however, all has not been well. A series of service outages have hit the network causing the entire i-mode system to fail and user criticisms of NTT DoCoMo to mount.

Server congestion lies at the heart of the problem. To get from the carrier's network to the rest of the Internet, all i-mode traffic must travel through a central gateway -- but servers at the gateway center are getting overloaded, company spokeswoman Yuki Isono said.

However, the problem is slightly more complex: engineers can't explain why the servers are becoming so overloaded, because the servers have a theoretical capacity of 8 million users, while there are only 6 million customers on the system.

As if to mock the carrier, the system once again collapsed last night.

Nationwide access to i-mode was lost for all users between 9:15P.M. and 1:43A.M. this morning.

The company announced several responses to the problem.

First, it will expand server capacity from 8 million users to 10 million users by the end of May and further expand this to 14 million by the end of June, said the spokeswoman. Secondly, the company plans to build new i-mode centers adding a second in the Tokyo metropolitan area by the end of August and a further center in the Kansai region of western Japan within the current fiscal year, which finishes in March 2001. Packet data switches will also be upgraded.

To reduce the flow of new subscribers to the service while it attempts to sort out the problems, NTT DoCoMo said it will also halve the number of i-mode terminals scheduled to ship into the retail channel between now and the end of May and also announced an immediate halt of advertising for the service in all media nationwide. Existing customers will also be receiving a partial refund to compensate for the problems.

I-mode is an increasingly important business for NTT DoCoMo. Packet data revenues, which just cover data transmission charges, were 7.6 billion yen (US$71.8 million) in March and the company earns an additional 9 percent commission on any charges paid by users for access to subscription services, figures for which were not available.

The glitch is a big blow for NTT DoCoMo, which is keen to push its i-mode system worldwide in competition with the WAP (wireless application protocol) systems currently begin used in many European markets. Its early start in developing such technology and strong links with Japanese handset manufacturers has led to innovative services and advanced telephones that in turn pushed adoption of the system and gave the company a place as a world leader in wireless Internet technology.

NTT DoCoMo, in Tokyo, can be found online at http://www.nttdocomo.co.jp/.

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