(keitai-l) Re: Why is PHS popular? (was - what's wrong in Europe)

From: Benjamin Kowarsch <benjk_at_mac.com>
Date: 07/26/01
Message-Id: <v04003a29b7853b006987@[10.0.1.2]>
>Benedict Evans wrote:
>>[...]
>> Getting back to Japan, why *is* PHS popular? 5.7m customers isn't bad. Put
>> another way, why did the arguments that failed to work in Europe (cheaper
>> smaller devices, longer battery life) work in Japan? Are there other
>> advantages that DECT/CT2 didn't have? Or is it just that DoCoMo wanted to
>> build it, so it did?
>>[...]
>
>The thing to remember is that PHS failed miserably as a voice network.
>The magic formula that allowed the PHS network to stop operating in the
>red was arrived at only when DoCoMo married PHS to their analog/digital
>(non PHS) voice network and used the PHS side to carry data.

No quite. DDI became the first profitable public PHS network in Japan long
before that.

>It could be argued that PHS network has yet to pay for itself.

Not in China. They're operating public PHS in 60 cities profitable ever
since they launched. And they do it without any subsidising. To the
contrary, PHS is such a success there that it has become a thorn in the
side of the cellular operators and the central government is trying to put
on dampeners. In China PHS is operated by the city subsidiaries of the
wireline network operator, while GSM and CDMA is operated by cellular
operators. The recent trade dispute over Chinese mushrooms between China
and Japan has been used by the Chinese government to ban the import of PHS
handsets from Japan, which has caused a lot of criticism amongst ordinary
Chinese people, who can't afford cellular but use PHS.

>4 years ago, sales droids were giving away PHS phones to anything that
>had a pulse (even hapless gijin) outside Book Boxes and Tsutayas in a
>desperate effort to build a (paying) subscriber base.  Highschool kids
>were hip enough to realize that they could pick up a phone, use it for
>the month it was turned on and when it got turned off, they would pick
>up a new one the same day.  Obviously, this is *not* what the marketing
>wizards had in mind when they targeted PHS to the OL/HS market.

This has little to do with the PHS technology itself.

The Japanese made one major mistake. The way they marketed PHS, they should
have used prepaid as the default payment method. I have been trying to tell
Japanese wireless marketing people this for quite a while and they claimed
that Japan is different and people do not default on their bills etc etc
etc.

>Also, I know of nobody who acutally uses PHS's ability to operate as
>a wireless handset for the home land-line.  That feature could also
>be argued to be a failure, but since I'm only a sample point of 1
>and since there are no real usage statistics it is a difficult point
>to argue.

Nothing could be further from the truth. TTnet, who now control Astel have
more success on their ISDN wireline service combining it with PHS cordless
than they do on their public PHS service. More and more companies rolling
out PHS based office systems (cordless PABX).

The two main reasons why hybrid Cellular/PHS isn't taking off are
- Initially the European refusal to adopt PHS as a cordless standard.
- Now Japanese regulations to force operators like DoCoMo to sell PHS as a
separate service with a separate monthly fee

There is hardly any country in Asia, where PHS isn't available as a
cordless technology and most of Latin America uses PHS for cordless. PHS
based office systems are doing very well with smaller and larger businesses
all over Asia. PHS is the world's most widely used cordless phone system.
If it wasn't for the "stubborn" Europeans who refuse to adopt PHS as a
cordless standard, we would be aware of PHS' success and problems with bad
debt in the Japanese public PHS networks would not have overshadowed the
good many news on PHS.

 It also bugs me that I can't send SMS messages to Japanese
>handsets when I'm in Australia or New Zealand,

The PHS p-mail design is a derivative of SMS. It would be fairly easy for
PHS operators to interconnect PHS with GSM SMS. The Taiwanese or the Thai
may actually do this at some point with their public PHS services. This is
due to a remainder of the pre-Meiji isolation mentality - the Japanese
simply often don't see the benefit of getting connected with the rest of
the world.

> but now that the
>Japanese handsets have matured beyond their GSM counterparts,

Have they ???

They are designed as toys, look like toys, have features like toys, break
like toys.
No maturity there as yet, I'm afraid.

The only area where Japanese phones really shine over European and US GSM
phones is battery life, which is of course greatly assised by the microcell
infrastructure in Japan (cellular as well as PHS). In Europe and the
Americas there is lots of rural space to be served where radio towers are
50kms away from the cellphone. This makes it more difficult for those
manufacturers to bring out ultra-low power models.

regards
benjamin



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Received on Thu Jul 26 09:00:00 2001