Japanese mobile carrier Willcom on the skids

Flask Data provides a one-stop cloud subscription for EDC, data management and statistics.

I was in Moscow this week and was pretty disappointed with the Beeline WiMax offering – which basically didn’t work in the area where we were staying (not far from Mendeleevska Metro station)

WiMax is not there yet and mobile data is still shaking out. According  my buddy  Todd Walzer (Todd lives in Tokyo and is a managing partner in www.iland6.com Capital and Development Co., Ltd).

Japan’s phone carriers have been managing this recession pretty well. NTT even recovered the #1 position in corporate profits from Toyota Motors.

However the 4th largest mobile carrier – Willcom – is in deep trouble.

Willcom entered the Japanese equivalent of Chapter 11, and the company is being  restructured under legal supervision.

Willcom started in 1990, and has operated a PHS (Personal Handiphone Service) network.  Thanks to cost advantage of this “half-duplex” technology, Willcom could keep a 5% share of Japan’s 100 million subscriber mobile voice market until 2 years ago. It was a pioneer of wireless data services, and an early leader in that market.

But PHS remained a niche technology adopted marginally in Japan and China, while Willcom’s competitors DoCoMo, AU and Softbank adopted CDMA with economies-of-manufacture from worldwide deployment.  Meanwhile, newcomer EMobile leapfrogged Willcom’s data rates with an HSDPA service.

In 2007-8, Japan’s Ministry of Communications made two “Broadband Mobile” licenses available, and Willcom applied proposing a “Next Generation PHS” network. The ministry favored this “Made-in-Japan” technology and awarded Willcom a license. But Willcom has struggled to bring off development of a platform with few prospective users worldwide.  It buckled under the $Billion+ development cost, on top of its existing $Billion+ debt.

Meanwhile the other licensee UQC (a consortium led by KDDI) deployed its WiMAX service on schedule.

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