Japanese Docomo takes the step from “post-smartphone” to the industrial metaverse

TOKYO — Japan’s leading mobile operator NTT Docomo will enter the industrial metaverse over the next few years by offering design tools and other tools powered by its own wireless technology, CEO Motoyuki Ii told Nikkei.

“Games have been the driving force in the metaverse so far, but industrial applications will grow in the future,” Ii said in a recent interview.

He acknowledged that Japanese companies have lagged behind their international peers in claiming the metaverse – a virtual space where people interact through avatars. But Ii sees helping businesses go digital as a way to come back strong.

For Docomo, which leads rivals KDDI and SoftBank in wireless market share but not profitability, the metaverse offers a chance to diversify. Docomo aims for operations beyond its core telecommunications business, including the metaverse, to account for at least half of sales by fiscal year 2025.

Jun Sawada, chairman of NTT, Docomo’s parent company, sees the metaverse as the group’s next core business.

“We need to plan for the post-smartphone era,” Sawada said.

NTT Docomo launched the XR World metaverse in March. (Image courtesy of NTT Docomo)

Docomo will work with partners, including startups, to develop the tools of the industrial metaverse. They will be made available to a wide range of businesses, large and small. By October, the carrier plans to set up a company with about 150 engineers and other employees to start the project.

For its metaverse tools, Docomo envisions a virtual space where engineers located remotely can meet and use the tools to co-develop products or test prototypes. These services will also use augmented reality, in which real-world objects are enhanced with contextual data.

The tools are intended to help manufacturers overcome staff shortages and pass on the skills of experienced workers to a new generation.

Computer-aided 3D design and development are already widespread in the automotive industry. But this process remains mostly confined to computer screens. The Metaverse should provide greater immersion so engineers can better evaluate virtual prototypes.

Competition is fierce in virtual reality glasses and other wearable devices, with companies such as Facebook parent Meta and Apple joining the fray. But bulky VR gear hasn’t hit the mainstream yet. Ii said Docomo aims to provide “user-friendly and comfortable devices”, including lightweight VR glasses.

Docomo’s industrial metaverse ambitions will be underpinned by the innovative Optical and Wireless Network, a next-generation communications infrastructure known as IOWN being developed by the entire NTT Group.

IOWN envisions optical signals replacing electrical signals as data carriers through networks. This would increase data transfer capacity by a factor of 125, while reducing latency and power consumption by factors of 200 and 100, respectively, according to Docomo.

NTT is developing proprietary semiconductor devices using this technology, which will make compact and lightweight VR equipment possible.

Such devices could use sixth-generation telecommunications, or 6G. Data transmission speeds on 6G are expected to be more than 10 times faster than 5G. IOWN is expected to be commercially available as early as 2025, with 6G hitting the market around 2030. NTT and Docomo plan to launch a 6G indoor trial with Japanese electronics group NEC and other partners during this exercise.

Docomo already has a metaverse activity for the consumer market. In March, the company created XR World, where attendees can attend concerts and other events. Users can access the platform through smartphones and PCs without relying on VR glasses.

Docomo’s search for industrial customers reflects the shrinking smartphone market in Japan and lower mobile prices. The carrier aims to close 30% of its physical Docomo stores by the end of fiscal 2025. In the meantime, it aims to attract more virtual visits from customers.

Docomo became wholly owned by NTT in 2020 and was delisted from the Tokyo Stock Exchange. The carrier earned an operating profit of 927.9 billion yen ($6.94 billion) for the fiscal year ended March 31, accounting for about 50% of NTT’s group-wide profit.

The metaverse market is expected to reach $828 billion in 2028, nearly 20 times its size in 2020, predicts Canadian analytics firm Emergen Research. Industry boundaries are blurring: Japanese advertising group Hakuhodo DY Holdings has started selling virtual ads for metaverse platforms.