The digital infrastructure in Japan in 1999 was somewhat similar to the urban Indian market of today. There were more mobiles than computers. It was a somewhat saturated market for mobiles. Broadband infrastructure was not very good. It was in this context that the largest mobile operator, NTT Docomo, launched its I-mode service in 1999. Wikipedia has more: In contrast with the WAP standard, which uses WML on top of a specific protocol stack for wireless handheld devices, i-mode borrows from fixed Internet data formats such as C-HTML based on HTML, as well as DoCoMo proprietary protocols ALP (HTTP) and TLP (TCP, UDP). It became a runaway success because of the well-designed services and business model, as well as the strong demand for mobile email services which are part of i-Mode.
Business Week (Jan 17, 2000) wrote about the technological underpinnings of I-mode and how the ecosystem approach made the service click:
With packet systems–as opposed to circuit-switched phone networks–there is no need for each user to receive an exclusive radio channel. That means many users can access the network at the same time. The packet model also reduces costs, since charges are based on the volume of data sent and received.
Takeshi Natsuno devised the business model to make this system work. First, he dictated that i-mode should serve as a portal site and lined up content providers that users could access directly from i-mode’s menu bar. Then he set up a billing method whereby DoCoMo would reap a commission for the services rendered by this first tier. Other content owners would be encouraged to code their Web pages for i-mode as well. But only those belonging to the licensed first tier could be accessed by the menu bar. ”People say the Internet has to be free, but we’re charging for it,” says Natsuno, 34. ”This is a model for the mobile Internet that others now want to emulate.”
Tachikawa, president and chief executive since 1998, insisted on a cheap pricing plan to guarantee the widespread adoption of i-mode. Subscribers pay about 4 cents to send a 250-character message, and half that to receive a message of the same size. Tachikawa also insisted that the functions be as simple as possible. ”I can access DoCoMo’s share price in just two clicks,” he says.
Asiaweek wrote about i-mode in January 2000:
DoCoMo has discovered a formula for making money off the Internet, something few companies have achieved. That’s partly because the company has managed to get Japanese, and particularly Japanese teenagers, to pay for specially-tailored wireless content even if it is only a few dollars a month for the right to use a cartoon character. Some i-mode sites provide crude online games, some sell horoscopes, others stock quotes. There are news services, e-mail, virtual-reality girlfriends. There is even an i-mode language, a growing collection of on-screen symbols called emoji Japanese for “picture words” meant to convey messages to other users in a keypad stroke or two.
DoCoMo charges a monthly subscription fee, which gives users access to myriad free sites. The carrier also charges for the amount of data a customer receives, not according to airtime. Users are always connected to the wireless Net as long as the phone is turned on an advantage over clunky Wireless Application Protocol (WAP) services offered elsewhere that require customers to dial up sites and then wait minutes for connections to be made. Another big reason for DoCoMo’s success: it eliminated the sticky issue of online payment that has slowed the growth of e-commerce on the wired Internet. The phone company keeps track of purchases and simply adds them to customers’ monthly bills.
Tomorrow: NTT Docomos i-mode (continued)