In Japan, There Are No More 2G Phones

The first month of 2008 saw something remarkable in Japan: Not a single second-generation cell phone was sold anywhere in the country. Every phone sold in January was 3G or better, and 85% of the population is already using 3G handsets. The picture of adoption isn't so rosy here in the U.S. and elsewhere. What's the hold up?For the sake of comparison, the number of 3G or advanced 2.5G handsets in the United States equals about 50% of the market. Strangely, where 3G is more widely prevalent, only 10% of the Western European market is using 3G handsets. In another indicator of Japan's more advanced wireless network systems, fully 60% of all handsets were capable of receiving mobile TV broadcasts, with 20 million Japanese actually subscribing to such services and viewing free content regularly. Verizon Wireless is the only U.S. carrier to offer similar broadcast TV through the MediaFLO network. AT&T is set to join it later this year. But subscriptions don't come anywhere near 20 million.

Why is the U.S. behind? First, the nation's fourth-largest carrier doesn't have any 3G network to speak of. Even though that's about to change, T-Mobile's phones all use 2.5G EDGE technology or less. T-Mobile will be launching its 3G network later this year, but so far has only a few handsets that can even access it. That will change over time.

Sprint and Verizon Wireless each cover vast portions of the country with their EV-DO 3G signals. Despite the good coverage, many of their handsets are still only equipped with 2G-capable radios. This is changing rapidly, however. Each carrier offers top-of-the-line feature phones as well as enterprise devices that can access their 3G networks.

AT&T also offers its own version of 3G, but its EDGE network is far more prevalent. Its lineup of 3G handsets has been slowly ramping up over the course of the last 15 months or so, with more arriving each day. Most of them are restricted to consumer-grade phones, with only a couple of 3G business devices in the roster.

For the most part, the networks and handsets are in place. So what's preventing more widespread adoption? Customer education, for one. Price, for another. If customers aren't aware of what 3G means and what it can offer them with respect to data services, then they aren't going to adopt it. While prices of 3G handsets have come down, the "free" phones offered by carriers are typically the bottom of the rung and not laden with too many features. That means no 3G. Since the bulk of Americans are still buying these free phones, that means slower 3G adoption.

This is all changing. But at a snail's pace. Japan is simply a couple of years ahead in technology adoption. We'll move beyond 2G. Some day.