Growth in Japanese Mobile Growth in Japanese Mobile Technologies and MarketsTechnologies and Markets

High Growth Asia Markets Part 1High Growth Asia Markets Part 1::Doing Business in AsiaDoing Business in Asia

October 2, 2003October 2, 2003Kazuo Hashimoto, Ph.DKazuo Hashimoto, Ph.D

President & CEOPresident & CEOKDDI Labs USA, Inc.KDDI Labs USA, Inc.

1ⓒ 2003 KDDI Labs USA, Inc. All rights reserved.

MajorInvestors

Fixed Phones Mobile phones Long Distance/

International Local

Mobile InternetService

PHS ISP

Kyocera/Toyota

NTT

Vodafone

NTTCommunications

JapanTelecom

NTT East&

NTT West

NTTDoCoMo

J-Phone

i-mode

J-SKY

NTTDoCoMo

-

OCN

ODN

au

Tu-KaEZweb

DDI

pocketDION

DDI＋KDD＋IDO ---> KDDI （from 1st Oct., 2000)

Major Telecom Carriers

2ⓒ 2003 KDDI Labs USA, Inc. All rights reserved.

Comparison in Frequency Allocation

Operator2G 3G

FrequencyRemarks for 3G handset

KDDI/au800 MHz(1.5GHz

For Tu-Ka)

800MHz2GHz

CDMA2000 1X / EV-DObackward compatibility with 2G (cdmaOne)

NTT DoCoMo 800 MHz1.5GHz 2GHz W-CDMA single

W-CDMA/PDC Dual

J-Phone 1.5 GHz 2GHz W-CDMA singleW-CDMA/GSM Dual

3ⓒ 2003 KDDI Labs USA, Inc. All rights reserved.

0

10

20

30

40

50

60

70

80

90

100

95 96 97 98 99 00 01 020

10

20

30

40

50

60

70

80

90

100

Fixed Mobile Fixed Internet Mobile Internet

Mobile Subscribers > Fixed SubscribersIn FY2002

(Source: Ministry of Public Management, Home Affairs, Posts & Telecommunications)

<Note> Fixed: Telephone + ISDN Mobile: Cellular + PHS

(in millions)

Significant Increase of Mobile Significant Increase of Mobile SubscribersSubscribers

4ⓒ 2003 KDDI Labs USA, Inc. All rights reserved.

02,0004,0006,0008,000

10/01 02/02 06/02 10/02 02/03

Oct. 2001NTT DoCoMo

FOMA

Apr. 2002Apr. 2002KDDI (au)KDDI (au)

CDMA2000 1XCDMA2000 1X

As of March, 2003As of March, 2003CDMA2000 1X: 6.8 millionCDMA2000 1X: 6.8 millionWW--CDMA (FOMA): 0.4 millionCDMA (FOMA): 0.4 million

(Source:Telecommunications Carriers Association)

(in thousands)

Remarkable 3G DiffusionRemarkable 3G Diffusion

5ⓒ 2003 KDDI Labs USA, Inc. All rights reserved.

0

10

20

30

40

50

60

70

80

93 94 95 96 9712

/9903

/0006

/0009

/0012

/0003

/0106

/0109

/0112

/0103

/0206

/0209

/0212

/0203

/03

Mobile Internet Subscribers Number of Subscribers

(in millions)

(Source: TCA)

Mobile Internet Subscribers:Mobile Internet Subscribers:　　More than 62 million in 3 yearsMore than 62 million in 3 years

Almost double in 2 yearsAlmost double in 2 years　　Diffusion Increase: 57% Diffusion Increase: 57% --> 83% in 2 years> 83% in 2 years

Remarkable Diffusion of Mobile Internet

5.6

6.6

6.9

7.0

7.9

7.9

9.4

13.8

16.5

59.1

72.3

0 20 40 60 80

Japan

Korea

Finland

Canada

Singapore

US

Germany

Italy

UK

Taiwan

France

(Source: Ministry of Public Management, Home Affairs, Posts & Telecommunications)

InternetInternet--enabled Mobile Phones:enabled Mobile Phones:　　More than 70% enabledMore than 70% enabled　　Highest rate in major Highest rate in major

countries/regionscountries/regions

6ⓒ 2003 KDDI Labs USA, Inc. All rights reserved.

PortalPortal

PlatformPlatform

ASP/CSPASP/CSP

(Maintenance Info.)(Maintenance Info.)

Control BoxControl BoxNavigationNavigation

Data TerminalsData Terminals

(Mileage, Driving & Loading Info.)(Mileage, Driving & Loading Info.)

InternetInternet

Data CentersData Centers

CSPCSP

Mobile NWMobile NW(CDMA2000 1(CDMA2000 1ｘｘ, 1, 1xEVxEV‐‐DODO，，

HH””，，DSRC)DSRC)

Fixed NWFixed NW

InfrastructureInfrastructure

Communications DevicesCommunications Devices

SensorsSensors

NavigationNavigation

SensorsSensors PCPC

Car TerminalCar TerminalECUECU ECUECU

Telecom ServicesTelecom Services

Contents/ApplicationsContents/Applications SolutionSolution

KDDIKDDI’’s s Commitment:Commitment:　　Value Proposition on Seamless Mobile/Fixed/Broadband Value Proposition on Seamless Mobile/Fixed/Broadband

NetworkNetworkValueValue--added Service Offerings for Ubiquitous Needsadded Service Offerings for Ubiquitous Needs

TelematicsTelematics InitiativeInitiative

7ⓒ 2003 KDDI Labs USA, Inc. All rights reserved.

Market ForecastMarket Forecast

SecuritySecurityP2PP2P

IPIP--VPNVPNCRM, SFA, SCM, CRM, SFA, SCM,

etc.etc.

$1.4 Trillion $1.4 Trillion Market in 2010Market in 2010

NavigationNavigationMaintenanceMaintenance

Emergency ServiceEmergency Service

More than 60 More than 60 million cars in million cars in

JapanJapanIPv6IPv6

Mobile IPMobile IPWLANWLAN

Growing areaGrowing area-- ITS /ITS /TelematicsTelematics-- EnterpriseEnterprise

EmailEmailWeb browsingWeb browsing

2G2G144kbps144kbps

Mobile PhoneMobile PhoneLow EndLow End

““Chaku UtaChaku Uta””OnOn--line Gameline GameImage/VideoImage/Video

Personal GatewayPersonal GatewayEE--CommerceCommerce

More than 60 More than 60 million Mobile million Mobile

users ( > Fixed)users ( > Fixed)

More than 70% More than 70% InternetInternet--enabledenabled

3G ~ 3G ~ 2.4Mbps2.4Mbps

4G 4G ~100Mbps~100Mbps

Mobile PhoneMobile PhoneHigh EndHigh End

Contents /Contents /Applications / Applications /

SolutionSolutionMarket SizeMarket SizeKey Key

TechnologiesTechnologiesMarketMarket