Japanese "seclusion(sakoku)" spectrum policy can be a suicide

The heated debate about Japan's spectrum policy has erupted among the industry experts lately.  We call it "spectrum seclusion(Sakoku)".

Just as in the U.S., Japanese broadcasters are vacating 700MHz spectrum in July 2011, and the regulatory body is currently considering how to allocate this precious 700MHz band.  Luckily, 700MHz is the same as the U.S. and other parts of the world for next gen spectrum band.  700MHz has also very desirable technical features for mobile service, so it is designated as the next gen spectrum by  APT Wireless Forum, the wireless standard body in Asia/Pacific.

In Japan, however, the available spectrum is "not enough" to be shared by 3 major mobile carriers, so the government is proposing to pair 700MHz and 900MHz, instead of the standard up/down link in 700Mhz.

I believe that it is insane to use such "orphan" spectrum, at this time in the 21st century.  True, until 3G migration, Japan allocated up and down link in reverse manner from the international standard.  10 years ago, another orphan spectrum 1.5GHz was put to use in Japan.  They could get away with it because the things were different in the past.  The global wireless market was much more fragmented back then, and Japan was relatively big market among them.  Japanese domestic vendors were much more powerful, as well.  Carriers could somehow manage to procure chips and equipments at reasonable price levels for the orphan spectrum.

Now, the global air interface standard is contracting into LTE.  The big divide between GSM/W-CDMA and CDMA camps are fading away.  Huge emerging markets are now the biggest customers for chips and equipments.  And Japanese vendors are now weakening, as they could not get hold of the global market due to the Japanese market's isolation.

If they go ahead with this orphan spectrum paring, there is no guarantee that international vendors such as Qualcomm and Huawei would provide the "special" products for Japan timely and reasonably.  Japanese vendors who are forced to produce them would lose the opportunity to sell the same products globally, again.  Without the scale, Japanese consumers will be left with more expensive, less innovative products.

I particularly am concerned because it would deter the advancement of M2M or embedded devices, which I believe will be the next frontier of the mobile service.  I was hoping that Japanese consumer electronics vendors would tackle on this opportunity, but so far, I don't see too many movement on this front.  M2M (machine to machine) has been on the market for some time, mostly in automotive telematics and utility telemetering area, but now the usage has just started to expand to other products.  The best example is Amazon Kindle. Radio is embedded in the device, and the users don't have to pay subscription fees - the underlining wireless is hidden in the e-book prices.  For the next gen spectrum, I believe that there many such products pop up.  For such products, the chip/equipment prices have to be very low, and to make it happen, the vendor has to scale.  To catch up with this trend, the vendors HAS to mass-produce the products.

The Ministry of General Affairs, Japanese regulatory body, has been quite sensitive about the competitiveness issues and have been implementing different measures to push Japanese vendors to globalize, so I don't understand their line of thinking in this spectrum issue.

They claim that other uses, namely temporary broadcast and ITS (car-to-car communication), already occupy the rest of 700MHz.  Uh..hello?  Moshi moshi??  Can you hear me?  Economist Prof. Nobuo Ikeda writes in his several articles that the broadcast spectrum is only used for live cast of marathon races, and ITS usage is still in laboratory, after so many years.  I suspect the real reason is the political power struggle with broadcasters and automotive companies.

I can probably calculate and compare the present value of the current use and possible M2M/future mobile market, taking consideration of the cost of migration for the current owners and probability of ITS service really happening.  But even without taking pains to do so, it is a common sense that the potential M2M and mobile service has a LOT more values.

It is just a TOTAL INSANITY.  Japanese mobile industry is heading to suicide.  We should fight against it.