3G handsets replacement, no impact on rollout date or earnings

date: June 17, 2001

Analysts are saying DoCoMo's commercial 3G services on October 1st should be on time despite the company's announcement on Friday that it was to replace some 1,400 3G handsets supplied by NEC.

Kate Lye, a telecoms analyst at UBS Warburg believes the situation is too early to be judged and that such action by DoCoMo will not disrupted the rollout date.

"I think it's far too early to judge that things could be difficult for October," said Lye adding that the replacement costs will be minimal and have little impact on earnings or rollout date.

"The biggest impact on DoCoMo for this rather than earnings is image, perception," she said. "As long as they manage that, I see little impact on earnings."

A spokesman from DoCoMo told the press on Friday that the situation was to upgrade new multimedia functions on the handsets and not to fix known problems, hence there are no planes to delay the October 1st commercial launch date.

Analysts said the replacement is to fix glitches on handoff difficulties, however the company insisted it was not due to technical problems, but a planned upgrade to improve the functions on the phones.

Handset owners have complained on various problems with the phones such as: short battery half that ran out within a day, handoff problems within the service area, cut off calls and the freeze on the screen.

DoCoMo's President and Chief Executive Keiji Tachikawa said recently that its 3G service would be nationwide in a year, have six million users in three years and be profitable in four.

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