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For NTT, Time to Up Ante on 3G Bets

Officials at Nippon Telegraph & Telephone (NTT) DoCoMo said they are investing 37 billion Yen (U.S. $342.7 million) over the next two years for the development of Linux and Symbian operating system technology on its next-generation wireless phones.

The news comes as the telecom giant is making a big push in the Japanese market for the adoption of 3G high-speed Internet phones under its brand name Freedom of Mobile multimedia Access (FOMA).

It also builds on NTT DoCoMo's already-announced commitment to embracing Linux and Symbian-based platforms in its products instead of Microsoft's competing handheld platform. The telecom giant said its decision was based on cutting costs and adhering to open standards.

While 2G wireless phones cover much of the country's inhabited areas, its slow data transfer rate of 9.6 kbps/29.8 kbps (upload/download) makes advanced service nearly impossible to pull off. Wireless telecom providers like NTT DoCoMo, KDDI/AU and JPhone/Vodaphone have been investing heavily in 3G, which will bring the 64 kbps/200 kbps speeds necessary for two-way video telephony and other bandwidth-consuming applications.

Six Japanese handset manufacturers will divvy up the investment - Fujitsu Ltd., Mitsubishi Electric Corp., Motorola Japan Ltd., NEC Corp., Panasonic Mobile Communications Ltd. and Sharp Corp. Under the terms of the agreement, NTT DoCoMo will share ownership rights with any new technology created from the investment.

According to its press release, NTT DoCoMo is hoping the cash infusion will spur the manufacturers into creating innovative products that take advantage of 3G speeds. The company expects to have a new series of 3G handsets, the FOMA "900i" series, on the market early next year, so it stands to reason the development now is funding the creation of cell phones that will replace next year's crop of phones.

Announced Thursday, the FOMA 900i series handsets come with a two megapixel camera and flash card memory slot for data storage. The phones are packed with applications such as an Macromedia Flash equipped browser, HTML email (deco-mail), avatar-based videophone capability (chara-den) and the ability to tie video and music to incoming signals (chaku-motion). Pricing on the phones will be announced when they are released.

NTT DoCoMo is relying on the 900i phones and its successors to increase its 3G presence in Japan over the next several years. As of December, the provider has 1.7 million FOMA customers on its network, a number Takeshi Natsuno, NTT DoCoMo i-mode planning department managing director, wants to increase in the coming years.

The i-mode is an always-on Internet service for mobile phones using the wireless application protocol , and according to NTT DoCoMo is used by more than 40 million Japanese users on the 2G and 3G networks.

Beginning in February, 2004, Natsuno said the company is going to lay out a very ambitious 3G expansion campaign, and expects to garner two million new FOMA customers by the end of March, 2004.

Currently, the FOMA footprint covers 96 percent of Japan; NTT DoCoMo plans to expand its presence by expanding its service in certain regions to bring the nationwide coverage rate to 99 percent by March, 2004. To do so, it's adding 10,700 base stations throughout the countryside and 800 in-building mobile communication systems for high-rise buildings, underground shopping areas and subway stations.