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DoCoMo warns on UMTS
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November 23, 2000: 3:29 a.m. ET
Japanese firm indicates 3G phones may not cut the financial mustard
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LONDON (CNNfn) - Japan's NTT DoCoMo warned Thursday that the billions of dollars spent by European firms on third-generation wireless services could be a waste of money.
Speaking to the Financial Times, a senior DoCoMo executive said revenues generated from 3G operations would be less than hoped for, because the technology still isn't suitable for carrying the services that are expected to be big moneyspinners, such as large video or sound clips.
The warning comes amid waning corporate interest in acquiring further licenses for Universal Mobile Telecommunications Standard (UMTS) services, as indicated by the farcical nature of recent auctions of UMTS permits.
Both Italy and Switzerland appear likely to generate far less revenue from selling licenses than they at first previously anticipated, because of the small number of applicants willing to stump up the cash for a permit. These flops, however, followed hugely lucrative UMTS auctions in Britain and Germany.
DoCoMo's opinion carries weight because the world's second-largest wireless carrier has developed its own, highly successful, mobile Internet access service, called i-mode.
Keichi Enoki, who runs i-mode, told the FT that 3G platforms would probably offer short music clips, allowing consumers to listen to part of a song, before ordering it to be delivered over another, more powerful, telecom network. European players want to offer subscribers access to whole songs via wireless networks.
The pressure is mounting on companies such as Vodafone Group PLC (VOD), British Telecommunications PLC (BT-A) and Deutsche Telekom AG (FDTE), which have lavished colossal sums on buying licenses to operate 3G services. The FT calculates that some  100 billion ($85 billion) has been spent on the new licenses.
DoCoMo's i-mode service has already attracted 15 million subscribers, far outstripping the take-up for its European equivalent, wireless application technology (WAP) – a technological standard inferior to expected UMTS services.
WAP offerings have met with a cool response from consumers, prompting Vodafone boss Chris Gent recently to play down the significance of the platform, once heralded as a major breakthrough in providing online mobile services. 
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DoCoMo
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