Japan's No. 2 wireless operator is cagey about where it's going but could be getting on track with a WLAN rail partnership

August 6, 2002

4 Min Read
KDDI: On Track With WLAN Plan?

KDDI Corp. has finally admitted that it will launch “experimental” WLAN services, making it the last of Japan’s wireless telecom triumvirate to announce such a move, although it still has no official plans to fire up a full-blown service.

Japan’s no. 2 wireless telco yesterday announced that it would be joining archrival Japan Telecom Holdings Co. Ltd. and Japan Railway’s long-running hotspot trial services, opening up connectivity trials on the 2.4GHz 8011.b standard to an “undisclosed” number of testers, starting in September, according to Kyoko Kakishima, a KDDI spokeswoman.

Undisclosed seems a key word for KDDI, which still officially maintains it doesn’t really see the point in WLAN services, despite last month revealing it might launch super-fast WLAN for HDTV (see KDDI Tries HDTV Over WLAN) after having conducted CDMA2000/WLAN experiments in May (see KDDI Makes Waves With 1x ).

This time 'round, the company is going to enable connectivity to laptops using its powerful DION ISP, which has more than two million subscribers, says Kakishima, who will not reveal how many people KDDI wants to sign on. “This is not a service,” she insists. "It’s a trial -- to test the technology and marketing -- and in the present situation we don’t plan a full service in the future."

The present situation is that a cluster of big names have launched WLAN trials in Japan -- with some huge claims, but no huge networks yet.

NTT Communications Corp. will have the biggest declared service, which it plans to boost to 1,000 hotspots by the end of the year. A consortium of companies led by NTT-ME is setting up another thousand by March 2003. Behind this, Softbank Corp. and Duskin Co. Ltd.-backed Yahoo! BB Mobile service plans to add high bandwidth to high calorie diets, going nationwide next year by putting hotspots in McDonalds and Mister Donut outlets. Old fixed-line telcos NTT West and East have 33 and 16 hotspots respectively, with plans to add more. And last week Ericsson AB (Nasdaq: ERICY) said that it has provided local service operator Yozan Inc. with authentication technology to help the company roll out a hybrid WLAN/pager/PHS (Personal Handphone System) system to 1,000 subscribers, starting in September.

However, among Japan’s Big Three wireless operators, only NTT DoCoMo Inc. (NYSE: DCM) has publicly revealed that it will build WLAN connectivity into its 3G FOMA service (see DoCoMo Plays Its Hotspot Ace).

KDDI, which is busily piling on subscribers for its CDMA2000 1xRTT 3G wannabe service (see KDDI Makes Waves With 1x ) meanwhile says it has “no plans” to integrate WLAN with its Qualcomm technology, even though Qualcomm Inc. (Nasdaq: QCOM) has (see WLAN/WAN, Thank You Qualcomm?).Of course, KDDI is looking into CDMA-WLAN, scoffs IDC Japan telecom analyst Daniel Newman.

On top of its HDTV-WLAN experiments, KDDI is continually exploring new services, and if Qualcomm has the chipsets, KDDI will consider the service, he suggests. In fact, KDDI is continually looking into new ways to get its CDMA technology into other companies' boxes. Today it announced that it will team with Matsushita Electric Industrial’s Pioneer to supply 1xRTT modules that will plug into Pioneer’s ITS “Car Nabi” (car navigation) systems to provide travel and information updates.

“They [KDDI] have to be considering it. KDDI tells everyone that it’s not interested in doing anything ever, and then -- pop! -- it makes a surprise announcement,” Newman says.

One of the reasons KDDI is being so cautious with WLAN is that it has yet to figure out exactly where it is going with high-bandwidth technologies and what its target audience should be, says Newman. For example, the company has hinted at ambitious plans to build intelligent networks to control appliances based on set-top boxes linked to 3G and FTTH networks. DoCoMo, despite the relative failure of its 3G FOMA service, has clear plans to hit the corporate market with WLAN-3G integration. But, says Newman, “KDDI is not sure who its customers are going to be.”

Meanwhile, adding its DION ISP to the Japan Telecom/Japan Railways trial -- which costs KDDI little or nothing because hotspots are already installed -- is a cheap and cheerful way of getting on board and checking out the market, says Newman.

That market has now reached 12 stations, says Japan Telecom spokesman Masaaki Kamimura, who admits that its own “experiment” could be a whisker away from being relaunched as a full service.

Kamimura says the partners are planning to broaden the number of stations and are “considering” a commercial launch, although he won’t say when. A WLAN-WCDMA combo phone is also under “investigation,” although the decision to go ahead with that rests with Japan Telecom's major shareholder, Vodafone Group PLC (NYSE: VOD).

— Paul Kallender, special to Unstrung

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