According to Telecom, Hong Kong, NTT Docomo is speeding up to launch i-mode for smartphones, since the demand for smartphones is growing over features phones.
“Some forecasts suggest smartphones will overtake feature phones [in terms of units sold]... in 2014,” Yamada said. In Japan this could come sooner, in 2013, he predicted. This proliferation of advanced devices provides an opportunity for mobile operators, but they “have to decide how to deal with smartphones,” if they are to extract the most benefit from the market.
DoCoMo created the DoCoMo Market applications store in April to make it easier for customers to find the content and apps they want; the store contains 500 content sites covering news, video, games and so on. “We plan to increase the number to 700 by the end of March next year,” Yamada said.
Furthermore, the operator plans to launch an i-mode version of the DoCoMo Market on 6 December.
The applications space provides mobile network operators with an edge over other players in the value chain since there are certain “value-added functions”, such as billing and authentication, that only they can provide, Yamada said.
“Carriers will be able to offer unique value to customers... and avoid the risk of becoming dumb pipes,” he said.
Mobile payment is a key area for DoCoMo. “We will shortly launch two more models of smartphone embedded with e-wallet [functionality],” Yamada announced.
As is the case for mobile operators the world over, DoCoMo sees future revenues coming from data.
“We already have a high packet ARPU (Average Revenue per user) ,” said Yamada, noting that 48% of its total revenues come from data. Furthermore, the telco generated ¥550 billion (close to €5 billion) from mobile content, including applications, he said.
“Data ARPU will account for more than 50% within this financial year,” Yamada said. The company's target is to halt the decline in aggregated voice and data ARPU within fiscal year 2011 and therefore return to ARPU growth in fiscal 2012.
“We are very well positioned to achieve this target,” Yamada said.
What is i-mode?
NTT DoCoMo's i-mode is a mobile internet (as opposed to wireless internet) service popular in Japan. Unlike Wireless Application Protocol or WAP, i-mode encompasses a wider variety of internet standards, including web access, e-mail and the packet-switched network that delivers the data. i-mode users have access to various services such as e-mail, sports results, weather forecast, games, financial services and ticket booking. Content is provided by specialized services, typically from the mobile carrier, which allows them to have tighter control over billing.
Like WAP, i-mode delivers only those services that are specifically converted for the service, or are converted through gateways. This has placed both systems at a disadvantage against handsets that use "real" browser software, and generally use a flat pricing structure for data. Even i-mode's creator, Takeshi Natsuno, has stated "I believe the iPhone (a phone that uses the traditional TCP/IP model) is closer to the mobile phone of the future, compared with the latest Japanese mobile phones."
In contrast with the WAP standard, which uses WML on top of a protocol stack for wireless handheld devices, i-mode borrows from fixed Internet data formats such as C-HTML based on HTML, as well as DoCoMo proprietary protocols ALP (HTTP) and TLP (TCP, UDP).
i-mode phones have a special i-mode button for the user to access the start menu. There are more than 12,000 official sites and around 100,000 or more unofficial i-mode sites, which are not linked to DoCoMo's i-mode portal page and DoCoMo's billing services. NTT DoCoMo supervises the content and operations of all official i-mode sites, most of which are commercial. These official sites are accessed through DoCoMo's i-mode menu but in many cases official sites can also be accessed from mobile phones by typing the URL or through the use of QR code (a barcode).
An i-mode user pays for both sent and received data. There are services to avoid unsolicited e-mails. The basic monthly charge is typically on the order of JPY ¥200 - ¥300 for i-mode not including the data transfer charges, with additional charges on a monthly subscription basis for premium services. A variety of discount plans exist, for example family discount and flat packet plans for unlimited transfer of data at a fixed monthly charge (on the order of ¥4,000/month).