TOKYO (WiMAX Day). The Japanese PHS operator Willcom Inc submitted its application to the Internal Affairs and Communications Ministry (MIC) for a 2.5 GHz WiMAX license last week.

According to a report in Kyodo News, Willcom is the first applicant for the spectrum license. MIC announced it would begin accepting licenses on September 12, and all applications must be submitted by October 12, 2007.

Numerous reports have stated that Willcom is a front-runner to receive one of the two licenses that the Ministry will auction. The company operates a PHS (Personal Handy-phone System) network throughout Japan, which it contends will enable it to quickly and inexpensively launch WiMAX services.

Willcom has some 160,000 PHS base stations stationed around japan, and as of August 2007 had some 4,645,200 subscribers.

PHS networks operate in the 1880-1930 MHz frequency band and use cells that can transmit up to a few hundred metres, which is small when compared to the range of WiMAX or GSM which is measured in kilometres.

Nonetheless, because it is not an incumbent telecom, and it has had proven success in deploying a new technology, it is rumoured to be a favoured contender by the Ministry. Willcom President Masaki Kikugawa said in the report that “We would like to kick off services as soon as possible,” and he also stressed that Willcom’s business plan should be acceptable to the Ministry “because it includes ‘complete’ measures for funding and other steps toward launching commercial services.”

The MIC stated that it will only offer two licenses for WiMAX and will exclude any bidder where an incumbent telecom owns more than 33% of its share capital. In recent weeks this has lead the top three telecoms, NTT DoCoMo, KDDI Corp and Softbank Mobile, to form groups that will bid for the WiMAX licenses, where the 33% shareholding is observed.

However, KDDI may have two horses running in the auction. An analyst at Bank Nomura in London noted that while KDDI recently inked a high-profile joint venture with Intel and Daiwa Securities, KDDI is also a shareholder in Willcom.

Willcom was founded by KDDI in 2004 as DDI Pocket, and in 2005 it sold a majority stake to the American private equity fund Carlyle Group and Kyocera for US$2.03 billion, which now owns 60% and 30%, respectively. KDDI owns the remaining ten percent in Willcom.

There has been no report that Carlyle Group will provide additional funding for Willcom in its bid for WiMAX licenses, and Willcom representatives were not available for further comment.