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Hiccups for DoCoMo on the path to 3G

There are growing signs that Japanese phone giant NTT DoCoMo is encountering problems with its upcoming third-generation phone service.

There are growing signs that Japanese phone giant NTT DoCoMo is encountering problems, including an expected spectrum and bandwidth shortage, with the third-generation phone service it plans to launch in less than two months.

Its chief executive, however, remains confident the company will still offer the world's first 3G network, the next generation of phone service that can deliver voice and data to a cellular phone on a network capable of broadband speeds.

Most of the supposed problems, documented in government filings, involve delivering third-generation services to Tokyo, a densely populated area. Millions using the same system could strain it to the breaking point, especially because of the huge files that third-generation networks are supposed to shuttle to customers. That has ramifications for other carriers, which are expected to offer third-generation services in cities that also have huge populations in relatively small areas, such as Paris, Los Angeles or New York.

A bandwidth shortage could potentially impact NTT DoCoMo's plans with AT&T Wireless in the United States, since AT&T is counting on its new partner to help it develop its own 3G network. Though no dates have been given on when the joint work would be ready for consumers, a setback in DoCoMo's home territory may push its expansion plans to territories such as the United States back as well.

"Generally, we're starting to see the inevitable transition from tech hype to what third-generation networking is really going to mean," Jupiter Research analyst Joe Laszlo said. "Carriers will have to retrench their expectations as to what they can offer for 3G."

NTT DoCoMo's problems also affect companies building applications for third-generation networks, Laszlo said. PacketVideo, which has received more than $100 million in financing, Emblaze Systems and SolidStreaming are constructing video-streaming applications for wireless devices. They may have to rethink their products, Laszlo said.

In recent weeks, NTT DoCoMo executives have acknowledged possible problems.

DoCoMo has applied to a Japanese government agency for additional spectrum to run its network. One of its own executives, Kyoji Murakami, a senior manager, explained that without the additional spectrum, DoCoMo thinks that its network will likely run out of room to deliver the data-heavy video and audio files in less than five years.

DoCoMo had expected to run its network on a bandwidth of 20MHz, with a quarter of the bandwidth being used to run earlier-generation phone services that will still be offered. Murakami believes the 15MHz won't be enough to run the 3G system in about five years, he said.

While the company is expecting the rich media files like video to take up more bandwidth than expected, it won't really know the extent until it actually launches the service, Murakami said.

Also, in its submissions to a Singapore government agency that is now auctioning off third-generation spectrum, DoCoMo competitor British Telecom said that initial testing by NTT DoCoMo is "finding (the network) unsuitable for carrying large video or sound clips, one of the services which could provide important new revenue streams for 3G operators."

An NTT DoCoMo spokesman declined to comment on the BT report. A spokesman for British Telecom said the company couldn't comment on where it got its information because it's in a quiet period prior to an initial public offering.

The admissions by NTT executives and government filings are in stark contrast to the other supposed problems the Japanese provider has had.

"The rumor mill hasn't been kind to NTT DoCoMo," Gartner's Brian Prohm said.