It’s an ugly solution to a serious problem for the Japanese operator: backward-compatible dual-mode handsets are not yet available. To make a call outside city centers, customers must instead use the 2G phone. This could erode the first-to-market 3G operators’ advantages – both for DoCoMo in Japan, and if the problems continue, Hutchison in Europe.
DoCoMo will allow its subscribers to run a 2G and a 3G phone on the same phone number.
Japanese mobile operator, NTT DoCoMo, plans to give its 3G subscribers the option to have two phones using the same number; a 3G handset and a 2G phone. DoCoMo hopes the plan will help overcome the limited coverage of its 3G network. At present, it only covers Tokyo, Osaka and Nagoya.
It’s clearly not a very good solution. Carrying two handsets around is inconvenient at best, especially when the 3G device costs several hundred dollars. However, given that existing technical problems with 3G handsets have already led to two recalls and seriously limited battery life, a backup phone might just appeal to DoCoMo’s 3G customers.
A better solution would be a dual-mode handset that could be used on a 2G or a 3G network. European operators all plan to launch with such devices, guaranteeing their subscribers mobile reception anywhere on the continent. However, no manufacturer has so far been able to make a dual-mode handset work.
This could be a factor in DoCoMo’s short-term success in 3G. Vodafone-backed rival, Japan Telecom, plans to launch its 3G services in June, using dual-mode handsets almost straight away. Since NEC and Matsushita believe their jointly developed dual-mode handsets will launch during H1 2002, this could do much to reduce DoCoMo’s head start.
Dual-mode devices will be even more important in Europe, since many network operators plan only to build 3G infrastructure in populated areas, saving significant amounts on 3G roll-out costs. This particular problem is unlikely to recur, however. Most European operators will probably not launch 3G services until 2003, by which time dual-mode GSM/W-CDMA phones are almost certain to be available.
However, the situation could cause problems for new entrant operator, Hutchison 3G. It is the launch customer for NEC’s dual-mode handset in Europe. Any further delays could put back its roll-out to 2003 alongside its rivals, eroding its potential first mover advantage. Launching in Europe without 2G compatibility would be foolish to say the least.