IPMobile's Revival Measure: Shifting to Chinese 3G Specification, Supported by HK Firm

Oct 24, 2007 18:46 Tetsuo Nozawa, Nikkei Electronics

IPMobile Inc revealed Oct 23, 2007 that it expects to receive a support of more than US$100 million from a Hong Kong company for the mobile communication service it is planning to start in Japan. In addition, IPMobile will switch its telecom format from current TD-CDMA to the "TD-SCDMA" 3G mobile phone specification developed in China.

Ahead of the upcoming service start due Nov 9, 2007, IPMobile will apply for permission to switch its telecom format to the Ministry of Internal Affairs and Communications as early as this week, the company said. If the application is approved, the move is likely to be the company's revival measure at the last moment.

IPMobile will receive financial support from Distacom Group, a Hong Kong based investing company that primarily provides capital to mobile communication service businesses.

"We have asked Distacom for capital injection for some time and finally received its informal consent" said IPMobile.

$1.5 million will be injected in October 2007 and $100 million by March 2008, but IPMobile said, "These are only the amounts at present. Distacom says it will prepare as much as needed if our business plan expands."

The company explained it will switch to TD-SCDMA, "Since TD-SCDMA's market extends across China, which is far much larger than the market covered by TD-CDMA."

"Considering more than 20 worldwide vendors have already developed more than 100 kinds of handsets, TD-SCDMA will drastically change procurement costs for equipment and our competitiveness in Japan," said IPMobile.

Given the short time left to procure equipment and establish facilities, however, it is difficult for the company to commence the TD-SCDMA service by November 9.

"We will initially begin commercial service by November 9 directly applying our seven TD-CDMA base stations for test in Tokyo and gradually shift to TD-SCDMA later," IPMobile said.

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