BuddeBlog

Japan’s mobile operator NTT DoCoMo (see separate report) licensed KPN Mobile to use i-mode technology in November 2001 and KPN began testing i-mode services in the Netherlands the following month. KPN aims to repeat in the Netherlands the success that NTT has had with i-mode in Japan, and thereby help reduce its own debt burden (estimated at €22.3 billion). For information relating to i-mode in Japan, see: Japan – Wireless Communications.

The licence deal between KPN and DoCoMo saw the Japanese company provide KPN Mobile with the intellectual property rights, service know-how and technologies to launch i-mode-like services over KPN Mobile’s GPRS and 3G networks. The contract runs until January 2012 and applies to KPN’s operations in the Netherlands, as well as in Belgium (KPN Orange) and Germany (E-Plus).

KPN launched its licensed i-mode product in Germany in March 2002 through E-Plus with handsets supplied by Toshiba and NEC. The service was not available to prepaid users. E-Plus had contracts with 80 content providers at launch, and they were contracted to take 86% of the revenue generated when customers access their pages. The 14% taken by E-Plus was higher than the 10% stake that DoCoMo took in Japan because E-Plus carried the billing risk.

The launch in Germany was followed by KPN Mobile in the Netherlands in April 2002, Belgium’s Base in October 2002 and SFR of France in November 2002. Furthermore, Telefonica’s domestic wireless unit, Telefonica Moviles Espana, was set to launch i-mode in the first half of 2003.

Take-up in Germany, the Netherlands and Belgium failed to meet initial targets for end-2002. Apart from a thus-far unproven demand for such wireless data applications beyond niche services such as for business users and ring tones for youth markets, a number of supply factors have hindered take-up. These supply issues have included complicated customer offers that require subscribers to take out separate voice, data transmission and i-mode subscriptions; lack of mobile data content suppliers; and the lack of handsets.

Even if it gets its supply issues resolved, competition from other wireless data products are a factor. Vodafone Live!, a wireless content games service, was reportedly outselling i-mode subscriptions in the markets where they both operate (eg the Netherlands, Germany, Italy, Portugal, Spain, UK, Sweden and Ireland).

One of the obstacles to the success of WAP and GPRS in Europe has been the limited availability of handsets from manufacturers. The large existing subscriber base of i-mode in Japan removes this problem. Japan’s NEC is the supplier of i-mode handsets to KPN, with the first available model being the N21i – a GPRS-enabled handset that has a much larger screen than regular handsets. Its display is in colour and it has improved sound quality. According to KPN, users are able to send and receive e-mails containing up to 1,000 characters and SMS messages up to 160 characters. The NEC handset has a built-in i-mode browser that enables users to read both i-mode-compatible Hypertext Mark-up Language (HTML) and Wireless Markup Language (WML) content.

NTT DoCoMo was planning to tackle the handset shortage head-on in 2003. It planned to increase its handset suppliers from the NEC and Toshiba to between 7 and 10 additional US and European manufacturers.

The lack of content has also been a problem for WAP and GPRS services in Europe. An important factor in i-mode’s success in Japan has been a broad supply of attractive content. Hoping to repeat this success, KPN Mobile has reached agreements with over 100 national and international content providers, including Reuters, Radio 538, Albert Heijn, Eurosport, Endemol, Cybird, Hudson, Meteoconsult, Hallmark, Dinnersite.nl and SNS Bank. KPN Mobile expects approximately 60 certified sites to be available in the Netherlands when i-mode is launched. Some of the content will be provided for free, while other content will require a subscription to be paid.

Despite the hyped range of multimedia offerings with i-mode, KPN Mobile reported that 80% of all subscribers used the email function. Email over i-mode was reportedly up to ten times cheaper to send for operators than SMS messages, but KPN claimed that email receivers had to be charged to avoid network congestion. Melody, images, news and weather were also reportedly high on the list.