DoCoMo says nationwide 3G by 2002

Despite news of the launch delay, analysts say NTT DoCoMo's bottom line will suffer little impact

In this story: $8.19 billion 3G capex Healthy cash flow for DoCoMo RELATED STORIES, SITES

By Staff and wire reports

TOKYO, Japan (CNN) -- NTT DoCoMo confirmed Thursday it would launch its commercial 3G service in October, four months later than planned, with nationwide services ready by 2002.

The delay has brought about a global wireless wake-up call and embarrassment for DoCoMo, the telco expected to be the first operator to roll out third-generation mobile services.

However, analysts agree that the setback would have little impact on DoCoMo's bottom line.

$8.19 billion 3G capex

The Japanese telco said that it sees no change in its plans for $8.19 billion in capital spending over the next three years to March 2004.

NTT DoCoMo also said it had a 6 million customer target for its third-generation mobile service.

"We expect six million customers by March 2004 but we will have the capacity for this number in March 2003," NTT DoCoMo president and chief executive Keiji Tachikawa told a press briefing Thursday.

NTT will "soft launch" its next generation mobile services at the end of May, with the commercial service not available until October 1.

The telco expects to sign up 4,000 users in the Tokyo area with its trial roll-out of the ultra-fast Internet access, data, video and CD-quality music on mobile phones.

DoCoMo is adamant that a nationwide 3G service will be ready by early 2002, and that it will be able to attract 150,000 3G subscribers by March 2002.

Healthy cash flow for DoCoMo

The decision to hold back the commercial launch of its hotly hyped 3G service sent shockwaves across the telecom industry this week, raising fresh concerns over how quickly companies with similar projects can recover billions of dollars of investment.

But analysts see DoCoMo maintaining healthy cash flow and investing in 3G more efficiently than its rivals.

"The benefits they'll receive from I-mode in this business year are material and relevant to the company's financial situation," says Kirk Broodry, a telecom analyst at Dresdner Kleinwort Wasserstein.

Investors agreed and nudged DoCoMo shares up 0.8 percent, ending the day on the Tokyo Stock Exchange at 2.52 million yen. The DoCoMo announcement came after the market close.

Reuters contributed to this report.

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