Is WiMAX the new battlefield for cellular operators?

Posted by: Kenji Hall on March 29, 2006

A battle over WiMAX is shaping up between Japan’s No. 1 and No. 2 cell phone operators. DoCoMo has just applied to the Japanese government to conduct a one-year trial run of the long-range wireless technology in central Tokyo. KDDI just completed its own experiments earlier this month. I wouldn’t be surprised if Softbank follows suit. So is WiMAX about to take off?

I’m not convinced just yet. Look at Wi-Fi’s record in Japan. It has been a non-starter because few people here tote around their laptops to talk to buddies on Skype or surf the Net at cafes or train stations, as they do in the U.S. The reason has much to do with the way Japanese have grown attached to email and text messaging and Net access on their compact, fashionable cell phones. Currently, few Japanese can access a Wi-Fi hotspot from a cell phone because the carriers offer almost no handset models with both cellular and Wi-Fi functions.

Granted WiMAX would give broader coverage in cities and rural areas than the contained Wi-Fi hotspots. I recently asked DoCoMo president, Masao Nakamura, whether he thought the company would ever make money on Wi-Fi and WiMAX stations. He shook his head. One telco analyst at CLSA pooh-poohed WiMAX. So why is DoCoMo proceeding? Because KDDI is. Because of DoCoMo’s tie-up with Korea’s SK Telecom, which is testing a similar long-range wireless tech called WiBro. Because it’s scared that rivals may bite off a chunk of its dominant share. All the wrong reasons, it would seem. But then you won’t see me complain if this means cheaper Net connectivity and a cell phone bill that’s less than $120 a month.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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