On Thursday, June 13, 2002, at 02:27 , Nick May wrote:
>>>> Imagine any customer of J-Phone or KDDI could just buy any handset,
>>>> stick their SIM card in and use it on a non-DoCoMo network.
>
> I am trying to imagine this - and I am not sure that the benefits are
> not
> outweighed by the disadvantages.
>
> What ARE the benefits exactly?
It means that NTT DoCoMo will not get the newest handsets exclusively
first and for some time before competitors will also be able to offer
them on their networks and thus it would improve competition.
Although, admittedly the deeper problem is PDC itself, because it is
owned by NTT DoCoMo. Manufacturers have to dance to DoCoMo's music or
risk being shut out.
The example of GSM shows that a standard which is equally accessible to
all market participants - service providers and manufacturers alike -
benefits the entire industry and end-users through economies of scale
and competition.
If the Japanese government had been as wise as the Korean government in
the mid 90s when they not only allowed but encouraged the predecessors
of KDDI to migrate from PDC to CDMA, they would have forced the entire
industry to migrate to CDMA and to do so in a manner that it was
compatible with CDMA as it is used anywhere else.
While DoCoMo was still in government hands and while the industry was
still expanding, this would have been achieveable and it would have been
a blessing for the economy.
Yes, handset subsidies might be less common today, but usage charges
would have come down.
Yes, there would be a strong presence of non-Japanese vendors in the
Japanese handset market, but the Japanese vendors would have become more
competitive and probably be on par with Korean vendors in the
international CDMA handset market.
Yes, DoCoMo's lead would be significantly smaller or they might even
have lost the number one spot, but Japanese consumers would be better
off.
You may think just because DoCoMo is being seen as a phenomenon
overseas, that would automatically qualify everything and anything about
the Japanese mobile environment to be perfect. But think again.
Imagine - say - Germany had not liberalised its telecom market and
Telekom had retained its monopoly over the technology, there is a good
chance that Germany and Telekom would today be seen as the wireless
phenomenon.
Instead of adopting GSM, they could have further developed their C-Netz
standard into a digital system and maintain a tight grip on the domestic
vendors, ie. Siemens, Bosch, Hagenuk etc. Quite certainly Telekom would
end up with the majority of mobile customers and with a population of 80
or 90 million that would have likely been in the same ballpark as
DoCoMo's figures. And while the rest of Europe would have enjoyed SMS
there may have been no such thing on Telekom's network. Thus, when they
eventually implemented messaging on their system it could have well
spawned a boom like i-mode.
In this scenario, it would now be the Germans who would tell us how
special their market is and how ingenious they are, how superior their
technology is over the rest of the world, how beneficial it was for the
domestic industry because it kept out Nokia and kept all those German
manufacturers alive most of which are now gone or faded into
insignificance.
Yes, there would be a number of unique things having come out of the
German market that would be attractive to the rest of the world, but
Siemens as a manufacturer of mobile gear would not be anywhere seen in
the international market and despite all the glitter, the whole success
story would be very fragile.
I picked Germany as an example because the size of its economy and
population and the mixture of technology industries is close enough to
Japan's to provide a comparable environment under the imagined
circumstances.
However, the point is that under protectionism advantages may seem to
outweigh disadvantages in the short, but in the long term it is
competitive markets that keep industries thriving.
regards
benjamin
Received on Thu Jun 13 09:44:49 2002