DoCoMo plunges on report of 3G delay

NTT DoCoMo shares have plunged as much as 7.95% in reaction to news of a 3G launch delay

In this story: Marred by communications glitches Risk too great to be late RELATED STORIES, SITES

By CNN's Kristie Lu Stout

TOKYO, Japan (CNN) -- NTT DoCoMo shares plunged as much as 7.95 percent in early morning trading in reaction to reports that the operator will delay its 3G service launch.

The Nihon Keizai Shimbun reports that the Japanese mobile giant has been hit with technical problems in software testing.

It says this is forcing DoCoMo to push back its planned roll out of third-generation cellular services from May to October.

DoCoMo, which has taken the lead in setting 3G standards, had planned to become the world's first to offer the service on May 30.

The Japanese telecom giant has been gambling that the rewards for being first are worth the risk.

Marred by communications glitches

However, the mobile operator uncovered bugs in the software testing, which raised concerns that a full-scale 3G launch would be marred by communications glitches, according to the Nihon Keizai Shimbun.

DoCoMo has declined to comment on the report, or a potential push back of its 3G launch date.

This is not the first time the telco has been hit with reports of a 3G launch delay.

NTT DoCoMo president Keiji Tachikawa told the Financial Times that only Matsushita Communications Industrial and NEC are poised to have 3G-ready handsets available by the May launch.

The statement followed a warning from U.S.-based Qualcomm, which developed the Code Division Multiple Access (CDMA) platform on which 3G services operate, that it would be years before 3G services became commonplace in Asia.

DoCoMo has been planning to launch its 3G service at the end of May with three types of terminals including an i-mode phone, a smart phone with a built-in camera, and a PC card for wireless PC access.

The 3G rollout was to unfold first in the 23 wards of Tokyo, plus parts of Yokohama and Kawasaki, to sign up a total of 150,000 subscribers in the first year.

Risk too great to be late

The reward of being the key player in a future of interconnected high-tech communications is too great for DoCoMo to risk being late.

Analysts say DoCoMo has invested substantially towards being first in the market with a global spending spree of $15.17 billion.

DoCoMo's global investments have primed the mobile operator to more effectively take on number-one Vodafone.

Vodafone's chances of fending off DoCoMo in the rush to launch 3G have been stunted by a lack of equipment.

DoCoMo has reported record profits from the explosive success of the i-mode Internet data service, whose 20 million users provide an unmatched testing ground for 3G services.

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