Four for Two in Japanese WiMax Bidding

Four companies are set to bid for the two WiMax licences on offer in Japan. According to local news reports, the quartet of bidders comprises mobile operators KDDI, NTT DoCoMo, Softbank, and the Carlyle Group-owned Willcom.  The four will bid for the right to offer national WiMax services on the 2.5GHz frequency.

According to some reports, NTT and its partners have earmarked Yen 200 billion (US$1.69 billion) to spend on WiMax infrastructure by 2015. If successful, NTT will work with Acca Networks, JP Morgan and South Korean carrier KT, on its roll out. The smallest mobile operator in Japan, Softbank, says it plans to team with DSL service provider eAccess and has targeted an even more ambitious Yen 250 billion capital expenditure should it win a licence.

Softbank and eAccess are backed by US investment bank Goldman Sachs.
Intel has also thrown its hat into the Japanese ring and is backing a bid by KDDI to win a WiMax licence in Japan, via its investment arm Intel Capital. Clearly, the development of WiMax networks and devices will in turn help the parent company sell more chips. KDDI is also working with phone-maker Kyocera and East Japan Railway Company.

Despite the high interest in the Japanese WiMax licences, analysts believe that future demand for such services will be tempered by the existing high-speed mobile services which are already available to Japanese users. Many advanced users have already switched to so-called 3.5-generation phones and yet faster mobile data technologies are already on the horizon, including NTT DoCoMo's super 3G.

Japan's telecommunications regulator, which wants to encourage new entrants, has insisted that existing mobile licence holders should control no more than 33% of the capital in any winning consortium.