A look inside DoCoMo's 4G world

By Osamu Tsukimori, CBS MarketWatch.com
Last Update: 3:00 AM ET March 3, 2004 
 
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B80347A18%2D5AE6%2D4DDB%2DA1B9%2D62532989F8AD%7D
 
YOKOSUKA, Japan (CBS.MW) - It may not be the Central
Intelligence Agency, but NTT DoCoMo also operates its
research and development center as if it were a
top-secret facility. 
 
Located 30 miles south of Tokyo in hilly inland
overlooking Tokyo Bay, DoCoMo's 27-acre R&D complex is
home to almost 1,200 employees, or about a sixth of
its entire workforce. DoCoMo invests nearly 130
billion yen ($1.1 billion) annually in R&D, or about
three percent of its sales.

On Tuesday, Japan's biggest mobile-phone carrier
allowed journalists inside the company's R&D center
for the first time in several years -- all in the name
of demonstrating what so-called fourth-generation will
look like when it rolls out the advanced mobile
service in 2010.

It's all about speed. Fourth-generation services would
allow for data transfer speeds of up to 20 megabytes
per second for uplinks and 100 megabytes per second
for downlinks -- up to 260 times faster than DoCoMo's
popular 3G services, which allow for downlinks of 384
kilobytes per second. 

"A mobile carrier investing this much money on
research and development is rare in the world," says
Kota Kinoshita, DoCoMo's executive vice president and
chief technical officer.

DoCoMo has been in the spotlight a lot recently. It
reportedly wanted to buy AT&T Wireless (AWE: news,
chart, profile) of the United States but was turned
off by the heated bidding war between Vodafone (VOD:
news, chart, profile) and Cingular Wireless, which
ultimately bought America's third-biggest wireless
carrier for a whopping $41 billion.

Of late, DoCoMo has reportedly been considering
selling its 20 percent stake in 3 UK due to
frustration with its British partner's struggle to get
subscribers for its i-mode service, which is popular
in Japan. 

Some analysts are skeptical about 4G given DoCoMo's
(DCM: news, chart, profile) already struggles with 3G.

"What may likely decide the fate and popularity of 4G
would boil down to a simple payoff of costs and
services," said Nagayuki Yamagishi, senior strategist
at UFJ Tsubasa Securities. "DoCoMo failed in its
three-generation service FOMA. If a user just needs to
watch television on the cell phone, 4G's high-speed
data transfers won't be necessary."

DoCoMo has just over two million third-generation FOMA
services and over 40 million subscribers to
second-generation i-mode services. 

DoCoMo has said specifications for 4G won't be decided
until at least next year.

"The 4G will make richer exchanges of communications
possible and introduce a refreshingly comfortable
wireless environment," said Toshio Miki, managing
director of DoCoMo's multimedia laboratories. "I think
virtual-reality communication will be introduced in
4G."

He is referring to technology that will allow 4G users
to speak to each other face to face with the use of
audio and video. 

DoCoMo is also looking to incorporate 3D audio
communication technology into fourth-generation
telecom services.

The technology would allow users to know where the
voice of callers is coming from. There are many ways
to use the 3D technology. It could be used at museums
where the guidance is given automatically when
visitors enter a target area. Visitors would instantly
tell the direction of the exhibit by sound direction.

Before launching 4G phones, DoCoMo is planning to
introduce the world's first 3.5G phones in the
domestic market by the middle of 2005. Halfway between
3G and 4G, 3.5G would cut the cost of transmissions by
one third with minimal changes to infrastructure,
DoCoMo said.

The 3.5G phones would enable downlinks at a maximum
data transmission of 14 megabits per second - up to 35
times as fast as the current DoCoMo's 384 kilobits per
second pace. The data transmission would average 2-4
Mbps, it added.

Using a notebook PC connected to a 3.5G phone, the
experience isn't that much different from typical
broadband high-speed connections. It could be a hit
with Internet users if the price is right.

Kinoshita said that DoCoMo's R&D partners include
Intel (INTC: news, chart, profile), Texas Instruments
(TXN: news, chart, profile), Cisco Systems (CSCO:
news, chart, profile), Hewlett Packard (HPQ: news,
chart, profile), Ericsson, Nokia (NOK: news, chart,
profile), NEC (NIPNY: news, chart, profile)and
Fujitsu.

Yokosuka Research Park is also home to more than 40
national and private research organizations from
around the world. The research arms of Matsushita's
(MC: news, chart, profile) Panasonic Mobile
Communications, Fujitsu (FJTSY: news, chart, profile)
and DoCoMo's parent NTT, for example, also have
facilities there, developing cutting-edge
telecommunications technology.

Osamu Tsukimori is a reporter for CBS MarketWatch.com
based in Tokyo. Asia bureau chief Allen Wan
contributed to this report.