To see the future of cellular telephones, come to Japan. There you can indulge in digital dating by way of live, recorded or written messages; participate in interactive talk shows and live auctions; get the latest reports on stock prices, horse races and the weather; or place an ad for an anonymous rendezvous. These are some of nearly 200 services offered by a company called Mobilephone Communications International (MTI). Virtually unknown in the West, it's the world's largest provider of content for the mobile Internet.
MTI, which is based in Tokyo, is the creation of Toshihiro Maeta, who is 34 year old. "Within a few years there will be more phones than computers connected to the web," he says. A mechanical engineer who attended Chiba University, Maeta showed his preference for telecom in 1988 by quitting IBM, where he was a database engineer, and going to work at Hikari Tsushin to sell mobile phones. In 1996, using his 600,000 shares in Hikari as collateral for loans, Maeta founded MTI, selling handsets on commission for telecoms, advertising them in magazines and offering them as prizes in raffles near amusement parks.
But even then he was preparing Internet content for the coming generation of digital phones, aiming to grab turf early by offering free as well as low-cost information services. MTI provides content in the most popular formats--wireless application protocol and wide band CDMA among them--and sends web pages so they can be read on different size screens, including the tiny ones on mobile devices.
Maeta managed to catch the moment of conversion from analog to digital phones. Today there are 53 million digital cell phones in Japan, the world's leader in mobile e-mail. The number of people using MTI's services, 1.4 million as of April, is growing 330% a year. The company had a gross margin of 63% on revenues of $70 million in 1999. First offered to the public in October on the Tokyo over-the-counter market, its shares have risen 67-fold to more than $2 million, or 2,500 times trailing earnings. Maeta's worth on paper: $4.5 billion.
MTI's phenomenal popularity capitalizes on the fact that there are 45 million Japanese under the age of 30--who, unlike their elders, eagerly embrace new technologies and are not shy about meeting strangers over the phone; cellular socializing is a natural. Some subscribers appreciate perfectly banal exchanges--like conference calls among strangers who say good morning to one another before heading off to work or chat groups that discuss the latest pop stars and fashion. Others prefer the anonymity of the mobile Internet for more exotic purposes, like the 21-year-old man who placed an ad seeking any woman "who could condescend to abuse me or who is in need of a personal slave."
Maeta isn't alone in this business--but he does seem to have the edge for now. The giant Nippon Telegraph & Telephone set up a mobile weather service several months ago. Dai Nippon Printing, the No. 2 mobile information provider, lets subscribers check out restaurant menus and theater show times. But, laments a spokesperson at Dai Nippon, "We offer only information services based on our guidebooks, while [MTI] has killer content we cannot hope to compete with."
MTI is always looking for a new angle. It's already preparing personals services for mobile videophones, due out by year-end. Already on tap: services like music distribution, credit information, games and e-commerce.
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