"Study Group on Optimal Area Construction for Cellular Telephone Services" Announces Report

Since October 2002, MPHPT has been holding the "Study Group on Optimal Area Construction for Cellular Telephone Services" (Chair: Mr. TAGAYA Kazuteru, Vice-President for Education, Chiba University). The Study Group compiled its findings as a report, entitled "Optimal Area Construction for Cellular Telephone Services," and MPHPT announced the report on March 10, 2003.
With respect to area construction for cellular telephone services to date, cellular telephone carriers are, in principle, setting up service areas. In the course of setting up service areas, the central government and local governments, when necessary, play supplementary roles for steadily and sequentially setting up service areas. In less-populated areas, etc., however, there still are a considerable number of areas not covered by cellular telephone services. This Study Group has been conducting research on optimal area construction for cellular telephone services to meet requests for further enhancement of service areas.

On optimal deployment of cellular telephone service areas
(Outline)

Chapter 1. Current situation surrounding cellular telephone services
1. Current level of cellular telephone diffusion
• The number of cellular telephone subscribers has increased year on year, e.g., from 10.2 million in FY1995 to 73.9 million as of the end of January 2003 (the growth has in general been stagnant in recent years).
• Of telecommunications service-related traffic, 41.9% of the total has been communications using mobile system terminals. This indicates that a shift to mobile terminal-based communications is on the rise.
• Looking into the ownership of cellular telephones by their attributes, it is understood that the ownership in municipalities other than major cities, and by senior citizens, the low-income group, self-employed people in the fields of agriculture, forestry and fisheries, and unemployed people are running below the national average.
2. Role of cellular telephone services in society
• With a rapid progress in diffusion, cellular telephones are finding a variety of applications depending upon specific user requirements, in every scene of their daily lives. The use of cellular telephones especially among young people is motivated by personal reasons.
Also, homes, schools and offices are the main places where cellular telephone terminals are frequently used.
• Of the number of emergency calls made to the police (number 110 in Japan), calls from cellular telephones are increasing their proportion (21.8% in FY1996 to 49.7% in FY2001).
• In local public entities, administrative information and other administration services in many fields, including disaster prevention and welfare, can be obtained by using cellular telephones.
3. Trends in introduction of third-generation cellular telephones (IMT-2000)
The IMT-2000 goes into full-scale commercial operations from October 2001. Presently, services are available from NTT DoCoMo, KDDI and J-Phone groups.

Chapter 2. Current situation of deployment of cellular telephone service areas
1. Progress in deployment as measured by current indicators
• To date, if a municipal government and its branch offices as well as industrial complexes and sightseeing spots therein are all covered for service availability, the entire municipality is deemed as being covered. The coverage ratio is calculated based on the number of such municipalities ("current indicators").
• In the "e-Japan Priority Program 2002," the numerical target of "increasing by FY2003 the proportion of municipalities of which the main and branch offices are covered within cellular telephone service areas, to over 95%, through the central government's support in deploying steel towers for mobile communications, in cases where the municipalities deploy the same in less-populated areas, etc." has been set forth.
The coverage ratio based on current indicators has increased from 92.5% in FY1999 to 94.2% in FY2001.
2. Deployment situation based on regional mesh statistics
• Since easy grasping of the actual deployment situation on the basis of population or area is not allowed by current indicators, the area deployment situation is grasped on the basis of both the regional mesh statistics map and the cellular telephone service area map as prepared from the National Census of 1995.
• Population within an area based on its nighttime population: 123,965,134 (98.7% of all)
• Population within an area based on its daytime population: 124,936,796 (99.0% of all)
• Number of households within an area: 43,614,036 (98.9% of all)
• Number of meshes within an area: 231,734 meshes (61.1% of all)
• Number of meshes where nighttime population within an area is one or more: 135,375 meshes (86.9% of all)
In less-populated areas, a progress on deployment of cellular telephone service areas is unfavorable when compared to the national average.

Chapter 3. Direction of deployment of cellular telephone service areas
1. Basic concept
• In light of the situation today where cellular telephone services are inseparably related to the daily life of the people, it is expected that cellular telephone services are made available to as many people as possible, but there are still many areas in which the service is not available. For further deployment of service areas, a large amount of costs is needed for deployment and operation of required facilities.
• It is considered that service area deployment will be carried out in areas badly in need of area deployment, by considering anticipated service needs, area deployment costs, substitutability with other communications means, and so on.
2. Involvement of public entities in service area deployment
• Cellular telephone service areas have steadily expanded on the basis of competitive deployment among cellular telephone carriers.
• Meanwhile, there is a situation in which, unlike in densely populated metropolitan areas with a large volume of potential traffic, cellular telephone carriers, who are also private companies, do not find a huge incentive for deployment of service areas in less-populated regions that do not warrant profitability.
• Considering the position of cellular telephone services in the society, although it is a basic rule that individual cellular telephone carriers deploy facilities independently one after another, public entities like national and local governments would also have to play a supplementary role. Government-subsidized and local government's own projects have been implemented since FY1991 and FY1997, respectively, and they promoted service area deployment in less-populated areas.
3. Estimation of profitability in service area deployment
• If public entities take up a supplementary role in service area deployment, the burden on cellular telephone carriers in deploying cell stations is dramatically reduced.
• Recently, many cellular telephone carriers cannot participate in government-subsidized and local government's own projects, because costs for facilities and operating costs to be borne by cellular telephone carriers are not justified by new revenues anticipated within the area covered by a cell station.
• The number of cellular telephone subscribers that a cellular telephone carrier requires to bring the revenues and expenditures into balance over six years (a deduction period for communications equipment) in installing and operating one cell station for cellular telephone service, is estimated based on model cases.
4. Measures for promoting service area deployment
• Circuit charges for wire circuits as installed by NTT regional companies between a cell station and an exchange of a cellular telephone carrier make up most of cell station operating costs.
• For operating costs, through adoption of measures for alleviating a burden on cellular telephone carriers, the improvement of the balance of payments and turning it into an incentive for business operations is effective as a measure to promote further area deployment.
• Measures for reducing operating costs
(1) Utilization of networks as built and maintained by local public entities
The networks built and maintained by local public entities, including fiber-optics networks for control of public facilities, should be used as wire entrance circuits for cellular telephones.
• In Yamaguchi Prefecture, a model project utilizing the "Yamaguchi Information Supernetwork (YSN)" is implemented.
(2) Expansion of wireless entrance, etc.
This ensures wireless circuits from a cell station to switching facilities of the cellular telephone carrier.
• Other measures
- Development of less expensive cell stations, etc.
- Promotion of utilization of cellular telephone services (e.g., utilization of cellular telephone services for delivering administrative information)
- Review of a charge that cellular telephone carriers are to bear in local government's own projects
5. Future direction of service area deployment
(1) Basic concept
• Cellular telephone carriers are expected to further expand service areas in order to adequately satisfy the users’ needs in consideration of the public nature of this service.
• In proceeding with it, it is appropriate that they not only alleviate a facility deployment cost burden in government-subsidized and local government's own projects, but also promote area deployment while cutting down on a burden of operating costs by positively utilizing the networks as built and maintained by local public entities as well as wireless entrance circuits, etc.
(2) Establishment of new indicators and targets of deployment
• In grasping the progress of area deployment in the future, it is appropriate to make the population within an area based on its nighttime population that can appropriately indicate the progress of area deployment within the residential areas, as a new indicator.
• To correct a disparity in area deployment between disadvantaged areas in less-populated areas, etc., it is appropriate to aim at increasing the population within an area in less-populated regions, etc.
• For the length of a period to achieve area deployment targets, it is appropriate to establish deployment targets over a three-year period because, in the long-term view, there are many undefined elements such as a progress in IMT-2000 service area deployment.
• For the deployment target, since the population as covered by a single cell station becomes fewer and fewer with a future progress in service area deployment, it is difficult to dramatically increase the population within an area in a short time. However, it would be appropriate to establish a target of making the service available to over 100,000 new cellular telephone users in less-populated districts, and to achieve the target at the earliest possible date by the end of FY2005 (theoretically, if this target is met, cellular telephone service would be made available to over 90% of the population in less-populated districts).
• The current indicators are not considered as deployment objectives, but it is appropriate to continue to monitor the situation through the current indicators.

Chapter 4. Direction of radio frequency (RF)-shielding measures
1. History of RF-shielding measures
• The cellular telephone service would have to be made available in enclosed areas like expressway tunnels or underground shopping arcades so that it can contribute to the advancement and diversification of people's daily lives, including improved convenience for road users, from the standpoint of optimal use of radio waves.
• Since FY1993, enclosed or underground areas have been added as the subject areas for steel towers construction projects for mobile communications, and RF-shielding measures have been taken for them. From FY1999, enclosed or underground areas have been developed as RF-shielding projects by using the Spectrum User Fees as the financial resource.
2. Current status of deployment
• Highway tunnels
Expressway tunnels: 73.3%
Tunnels on roads under direct national control: 83.3%
• Underground shopping areas: 84.2%
• Underground railway stations: 58.9%
3. Future direction of deployment
For expressway tunnels and tunnels on roads under direct national control, underground railway stations and shopping areas, over 90% deployment is intended for achievement at the earliest possible date by the end of FY2005. For other enclosed or underground areas, it is appropriate to promote deployment in consideration of future trends, such as demand for deployment.On Optimal Area Construction for Cellular Telephone Services

(Points of the Report)

• To change methods for monitoring the current implementation status of area construction for cellular telephone services (the degree of coverage ratios)
<Before the change> When municipality halls, branches, industrial parks and all sightseeing spots are covered, it is deemed that a municipality in question is covered as a whole. Based on this assumption, the coverage ratio of municipalities on a basis of the number of municipalities is to be calculated.		<After the change> The coverage ratio of residential areas can be adequately indicated when referring to the population within an area based on its nighttime population. Based on this assumption, the current implementation status of area construction for cellular telephone services (the degree of population coverage ratios) is to be assessed on a basis of the nighttime population.
• Set forth numerical targets for the population coverage anew
<Less-populated area, etc.> It is appropriate that a target aiming at enabling additional 100,000 or more to use cellular telephones even in less-populated areas shall be set forth and said target be attained at an earliest possible time before the end of FY2005. Through completion of this target, according to a pro forma calculation, it is thought that more than 90% of population in less-populated areas, etc. will be enabled to use cellular telephones.
<Underground facilities and tunnels, etc.> With regard to tunnels on highways and national roads, underground stations and shopping areas, it is appropriate that a target aiming at raising the coverage ratio for cellular telephone services to 90% or higher shall be set forth and said target be attained at an earliest possible time before the end of FY2005. As regards other underground facilities and tunnels, it is appropriate that based on trends in assessed demand for the construction of infrastructures for cellular telephone services, the coverage ratio be raised on a flexible basis.
• Propose promotion measures for raising the population coverage ratio
In order to promote construction of service areas, it is effective to reduce operating costs.
i) Utilization of networks maintained and possessed by local public entities To utilize networks maintained and possessed by local public entities, such as fiber-optic networks for management of public facilities, as wire entrance links for use of cellular telephones
ii) Expansion of wireless entrance, etc. To ensure wireless links between cell station facilities and switching facilities of cellular telephone service carriers

(3) Practical measures for reviewing the current regulatory frameworks on BS digital broadcasting: It is appropriate to relax the current upper limit of capital investment from "less than one-third of voting rights" to " one-half of voting rights or less."

3. On continuity of broadcasting services - treatment of broadcasters which are in difficulty of management --
In cases where a broadcaster is in difficulty of continuing broadcasting services, from the viewpoint of ensuring benefits of viewers/listeners, it is appropriate to approve drastic and exceptional relaxation for ensuring continuity of broadcasting services under a certain condition.

4. Matters to be deliberated upon other than the "principle of media ownership rule"

Considering matters of interest presented by members of the Study Group, in order to contribute to the future broadcasting administration, the following four items were deliberated upon as challenges: "Concept of broadcasting," "On Japan Broadcasting Corporation (NHK)'s business operations (based upon the First Report)," "On community-based broadcasting and broadcasting networks" and "On public scheme for production/distribution of broadcast programming."