KDDI accelerates smartphone shift, stays mum on iPhone

Japan's second-largest mobile operator announced new smartphones and a cheaper pricing plan to rekindle subscriber interest

KDDI, Japan's second-largest mobile operator, on Monday announced a new range of smartphones, accompanying services, and a low-cost pricing plan, but stayed mum on whether it would offer Apple's new iPhone next year.

The Tokyo-based company, which runs the "au" mobile network, has been slower than its competitors to introduce advanced phones, and has seen its share of new subscribers fall as a result. Its lead over Softbank, the third largest operator, has dwindled as the upstart operator piled on contracts through its low-cost plans and exclusive sales of Apple's iPhone and iPad line on its network.

KDDI President Takashi Tanaka repeatedly declined to comment on local news reports that his company would soon offer the iPhone on its own network, but he said KDDI would accelerate its shift into smartphones that offer high-speed Internet through its WiMax service, a high-speed, long-range wireless Internet technology. KDDI had success with the previous generation of phones by offering designer brands and other features, and has lagged domestic rivals in moving to higher-specification models.

"In a few years, our share of traditional phones will be barely 30 percent, perhaps 20 percent. Once our customers try using the Internet with smartphones they can't really go back," Tanaka told reporters at a press conference in central Tokyo.

The new lineup includes the HTC EVO 3D and Motorola Photon, also available internationally, plus several handsets from local manufacturers like Fujitsu and Sharp that have technologies aimed at the Japanese market. Fujitsu's Arrows Z phone has a special interface for entering Japanese characters drawn by hand on the touchscreen, while a smartphone from Sharp's Aquos line is equipped with a sub-screen that lets users check the time and operate its music player without turning on the main display and draining battery life.

Tanaka also announced a new pricing plan that gives users unlimited free calls at certain times on the au network for 980 yen (US$13) per month. The plan is almost identical to one that Softbank has been offering for years.

KDDI's subscriber lead over its rival has steadily diminished in recent years. In June, 2008, the month Softbank began selling the original iPhone, KDDI had about 30 million subscribers to Softbank's 19 million, while at the end of last month it had 33.5 million to Softbank's 26.6 million, according to data from Japan's Telecommunications Carriers Association. NTT DoCoMo remains the number one operator with about 58.8 million subscribers.

KDDI is also emphasizing services on its high-speed WiMax network. On Monday it announced video calls over Skype would be available on a specially designed application, as well as a service to automatically save pictures taken with phones online and deliver them to computers through a tie-up with Eye-Fi, the maker of wireless-enabled memory cards.

The new phones and services will be available by the end of this year.

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