1 3G Mobile Services in Japan Hideki Yagi Communications and Information network Association of Japan 10th ATIE

2 Changes in the Number of Cellular Phone Subscribers Source: MIC (FY) 3G (33%) Number of mobile phone subscribers (86 mil.) 2000 First mobile phones with cameras 2001 Start of 3G service Million subscribers 1999 Start of mobile internet access service Mobile phone with camera (75%) Can connect with Internet (86%)

3 Contents Provider Information Charges Commission fee (9% of Information charges) Information Outline of i-mode i-mode success factors i-mode Business Model Use of packet network enables inexpensive always-on access. Use of Internet standards: TCP/IP and HTML subset Attractive handsets. Build a WIN-WIN relationship with content providers. i-mode users NTT DoCoMo Packet Communications Charges

4 Roll out of 3G Commercial Services NTT DoCoMo W-CDMA HSDPA KDDI CDMA2000 1X CDMA1xWIN (EV-DO) VodafoneW-CDMA Dec Oct May Introductory Service : Launch of Commercial Service Apr

5 Classified Subscribers of Cellular Phone Carriers 2.5G 3G Total W-CDMACDMA2000 NTT DoCoMo 38.8 (-1.3) 10.2 (+1.8) 48.3 (+0.5) KDDI au 5.3 (-0.3) 17.4 (+0.6) 22.7 (+0.3) Vodafone 14.4 (-0.4) 0.7 (+0.3) 15.1 (-0.1) Total 57.8 (-2.0) 10.9 (+2.1) 17.4 (+0.6) 86.1 (+0.7) as of Feb 2005 (Millions) ( ): Compared with End of Dec. 2004

6 Improvement of 3G Handsets Performance 2002 Initial Model Models Latest Models Latest 2G (PDC) Models Weight150g g g92-130g Size204CC cc cc Dynamic Standby time 55 hours180 hours hours hours Continuous talk time 90 min130 min min min Camera featuresX100, ,000 pixels 2M pixels1-2M pixels Packet Transmission Speed (Max.) 384kbps 28.8kbps Video phoneXOOX Actual PriceUS$400 or more US$250US$300US$ Price: in the case of the migration from the model in use

7 Enriched Handset Lineup (1): FOMA 901i Series The Basic features of FOMA 901i handsets have been upgraded! Realistic audio-visual effects when using i-appli 3D sound X 3D graphics Larger file size to store ring tones, “check-motion” video clips and i- mode mail attachment files Expanded files size Enhanced multimedia capability Notifies incoming mail with “chaku-motion” video clips, upgraded Flash TM functionality Enhanced security Security scan (anti-virus function), FeliCa remote lock Convenient features Menu screen (customized icons), Mail (chat mail), Installed music player in all models SH901iC F901iC N901iC D901i P901i

8 Enriched Handset Lineup: Dual-mode FOMA+W-LAN handset Allows businesses to create a complete IP-based corporate communication network. Provides seamless voice and data access from both inside and outside office.

Outdoor (Pop. Coverage: %) Indoor (No. of systems) [Outdoor] POP coverage (%) FY2004 2H +1,500 (forecast) FY2004 1H +630 Nationwide service launch 2002/4 Metropolitan area service launch 2001/10 [Indoor] No. of systems No. of BTSs Approx. 14, ,670 2,000 2,300 2,800 3,800 No. of BTSs Approx. 17,300 FOMA Coverage Expansion ,000 2,000 3,000 4,000 5, /3 2003/32004/32005/3E 2006/3E 12

10 FY2002 (02/Apr.-03/Mar.) FY2003 (03/Apr.-04/Mar.) (Projected) FY2004 (03/Apr.-04/Mar.) Operating Revenues Operating Income Net Income EBITDA Capital Expenditures Billions of US$ Achievement of NTT DoCoMo

11 ARPU/MOU of NTT DoCoMo 2.5G+3G 3G (Apr.-Dec) 2.5G+3G 3G (Apr.-Dec.)

12 Linkage with Brick-and-Motor Businesses: Mobile Wallet Service Released mova model Released FOMA model Released new FOMA models