Mr. Frank Seiji Sanda (President & CEO of JCI)

Here we introduce an interview article with Mr. Frank Seiji Sanda, President & CEO of Japan Communications Inc. (JCI) as a company visit report No.3.

JCI is the company established on May 24 (Fri.), 1996 which is actively promoting the PHS in Japan. It currently has 162 employees and its headquarters is located in Minami-ohi, Shinagawa-ku, Tokyo, Japan.

Q. JCI's business has been successful as the Mobile Virtual Network Operator (MVNO) pioneer company in Japan, so we'd like you to explain what the MVNO is.

JCI launched its own MVNO business model in 1999 first in Japan. The MVNO is to provide its customers with the mobile service utilizing other mobile network operator's wireless access network without having its own licensed spectrum. World's first success example of the MVNO was Virgin Mobile Telecoms Ltd. (UK), however, its service was voice only. Japan is the leading country in data communication and JCI is the first data-oriented MVNO in the world. Recently, an interest in the MVNO business model has rapidly increased in Japan. It's passed almost three and a half years since so-called "MVNO Guideline" was issued by the Ministry of Internal Affairs and Communications (MIC, former the Ministry of Posts and Telecommunications) in June 2002 and the mobile communication service's business environment has also changed greatly, such as the full-scale spread of 3G service, speeding up of the PHS service, surface spread of the wireless LAN spots etc. Such interest in the MVNO business model is increasing among the peripheral business area markets as well in addition to the mobile network operators. There may be an alliance between the MVNO and Vodafone or possible newcomers to the mobile communication business such as Yahoo, E-Access etc. Under such backgrounds, the MVNO conference has been established in November 2005. 22 companies and organizations joined the conference where various issues including wireless connection, tariff system etc. are to be discussed from now on to pressure the administration etc. to seek any solutions for the common issues by exchanging ideas with them. I was assigned as chairperson of that conference and we'll try to do our best as MVNO pioneer company though our ability is limited

Q. How do you estimate the PHS technology?

I've been a fan of the PHS for a long time and contributed a great deal to an inauguration of the PHS service in Japan while I was at Motorola Japan. Actually, the worldwide topical Fixed-Mobile Convergence (FMC) has already been put into operation utilizing the PHS in China now and its technical precedence is proved to be quite excellent. In other words, in China, it's been realized that the PHS's business model is the most cost-effective. However, it's really regrettable that there was a period in which the PHS seemed to have faded out because its system concept was somehow changing to compete with the cellular phone. It was also quite difficult to settle the PHS's tariff. At the beginning, the PHS was forced to start the service under quite unfavorable business model to pay large portion of its sales as an access charge to NTT because the PHS was placed in a position of only paying a call charge to NTT which has the network backbone.

Q. What business model is JCI trying to build from now on?

We are considering a business model for simple and easy type terminals which can be used without being aware of making communication. We'd also like to aim at the overseas market as well so that we think that it would be desirable if we could establish an environment enabling agile operation even in 32 Kbps PHS circuit switching system which is the mainstream there. Only simple services such as postal, photo, shopping etc. can be provided even by lighter OS than Windows^(R). We are hoping to supply stand-alone terminal which can be used just after purchasing at the shop. Further, we have plenty of know-hows for network management and the network efficiency more than four times higher than at present will become available. We are prepared to offer this technology to overseas as well if required. And the PHS's weak point is indoor radio wave penetration and in order to overcome this problem, we have been providing a product with base station having repeater function in Japan. Any ideas such as to supply a battery charger with such function etc. would be necessary. (Editor's Note : At present, a product with such base station named " HomeBox " is available in China.)

(PHS MoU Group Secretariat)

We are hoping that JCI will play an active role in the PHS MoU Group as well from now on and many thanks for receiving our interview today.

(Postscripts)

Mr. Sanda founded JCI after experiencing the representative of Motorola Japan and Apple Japan each and completed its listing at Tokyo stock exchange as well. He is one of the most talented persons in the Japanese telecommunication industries and knows many background stories about the PHS' birth and the overseas telecommunication situations as well. We were very much encouraged by his words that "It should be proud facts for the PHS that its usage in China was the world's first success example of the FMC". We actually felt that English seems to be his mother tongue rather than Japanese. As a matter of fact, he told us various precious things during the long interview of this time, however, unfortunately we are forced to present only a small part of that for lack of space. We are looking forward to hearing Mr. Sanda's speech at the next PHS MoU General Meeting if possible because JCI is to become the PHS MoU's regular member.

Note : Windows^(R) is a registered trademark of Microsoft Corporation.

(Interviewed on Monday, December 5,2005)