Webscale and transmission network operators' interests are aligning as the 5G era dawns
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5G and data center-friendly network architectures
Matt Walker / MTN Consulting
Webscale and transmission network operators' interests are aligning as the 5G era dawns
The launch of 5G by South Korean operators serves as a first benchmark for other operators around the world
NTT DoCoMo's early-bird gambit
Some might question the wisdom of being a first mover in the LTE space (perhaps maybe for CDMA players) and many other operators in the region have taken a wait-and-see approach to LTE such as Korea Telecom and CSL's competitors in Hong Kong. Only time will tell if there is really a first-mover advantage. Irrespective, it is clear that DoCoMo needed to revitalize its strategy in the midst of troubling times in its home market. While the operator has found initial success in its Indian tie-up with Tata, the Japanese mobile market is facing a recession along with the overall economy.
As shown in the table below, DoCoMo has seen its service revenue fall by 13% over the last five years in local currency terms while its mobile market share has also fallen below 50%. Profitability has increased largely due to a restructuring of the handset subsidy system and the capex for the LTE network rollout remaining below 2007 levels. DoCoMo has largely banked on LTE to revitalize its domestic market strategy.
DoCoMo decided to price its LTE services at a premium, offering 37.5 Mbps at 1,000 yen for 2 GB of data and 6,510 yen for 5 GB of data with additional blocks of data being available for purchase on both two-year contract plans. In comparison, its largest competitor in the dongle space eAccess charges 3,880 yen for unlimited service on its 42 Mbps HSPA+ offering. UQ Communications, a Wimax operator partially owned by KDDI has a similar offering priced at the same rate and has recently launched Wimax-2 to increase its competitiveness.
DoCoMo is trying to attract the high-end users with its LTE offering before getting aggressive in the mass market. In terms of its overall strategy, the company has already announced its intentions to make its LTE network available to other telecom companies, as there are certainly several other ISPs, cable operators, tablet manufactures and automotive companies keen to enter the potentially lucrative data-MVNO business. DoCoMo will have a considerable head start in this market as rivals KDDI, SoftBank and eAccess aren't expected to deploy LTE services until next year.
DoCoMo has been less aggressive than other LTE operators such as Verizon in deploying smartphones and VoIP using LTE, but the company has demonstrated other LTE-based services such as a real-time translation service and an augmented reality service.
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