INTERVIEW - KDDI eyes WiMax investment as growth stalls

By Mayumi Negishi and Reiji Murai

TOKYO (Reuters) - KDDI Corp, Japan's No. 2 wireless operator, could invest more in a new WiMax venture in its hunt for new revenues as growth in its voice services slows and it waits to launch LTE technology, its president said.

The company, which competes with sector leader NTT DoCoMo Inc and No. 3 Softbank Corp in a saturated market, hopes demand for high-speed Internet downloads and uploads will help expand its user base.

Japan's first WiMax venture UQ Communications, set up by KDDI and investors such as Intel Corp and Kyocera Corp, began operations earlier this week to tap new demand. KDDI in May invested 30 billion yen ($312.5 million) in the venture, in which it holds a one-third stake.

"We think of UQ as part of KDDI," President Tadashi Onodera told Reuters in an interview. "We will of course invest more money if necessary."

WiMax has largely lost the battle to be the next generation mobile technology to Long Term Evolution (LTE), favoured by the majority of carriers because it can be build on existing systems.

But KDDI, which will not launch LTE until 2012, believes the WiMax chip is following the same trajectory as WiFi and will eventually be built into laptop PCs as a given, Onodera said.

As more users opt for low-cost basic cellphone plans, average revenue per user of KDDI's voice services will continue to decline for one to two years, he said.

WiMax gives KDDI access to notebook PC users surfing the Internet -- a completely different market from cellphones, he said.