J-Phone predicts steady 3G take-up but no early profits

date: April 18, 2001

J-Phone, Japan's third biggest mobile phone operator, said on Wednesday it expected a delayed new-generation cellphone service to trigger slow but steady customer demand -- but no profit for "several years".

J-Phone, which is backed by Britain's Vodafone Group and British Telecommunications , plans to spend around 700 billion yen ($5.7 billion) in initial costs for its Japanese third-generation (3G) network, which will allow mobiles to offer high speed Internet, data, video and quality music services.

But in a stark warning to European rivals, which have forked out billions of dollars on European 3G licences and networks, chief technical officer Takeshi Hashino told the press: "We will try and contain costs...and initially we won't make money.

"It will take several years for us to recover the investment." Hashino said the group, which is majority-owned by Japan's number three carrier, Japan Telecom, had yet to make any handset orders for its 3G launch in Tokyo next June.

But he said J-Phone was hoping a six month delay in its first 3G cellphones -- which will come to market over one year after arch-rival NTT DoCoMo but close to a planned European launch -- would ensure its network was compatible with European standards.

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