Briefing the EU Attaches at the EU Embassy in Tokyo about the reasons behind Vodafone’s departure from Japan
The deeper reasons and background on why Vodafone failed in Japan
Today (March 23, 2006) I was invited to brief the Technology Attaches of the Embassies of the 25 European Union countries here in Tokyo about Japan’s telecommunications sector (both fixed net and wireless) in a one hour presentation + discussion. I had offered several alternative topics and the conference of EU Technology Attaches selected the most provocative title I had offered:
Vodafone KK’s Chairman and former NTT-DoCoMo Vice-President Tsuda, who had worked 34 years at NTT and DoCoMo (and who resigned from his Vodafone-Japan CEO position a few weeks after being head-hunted), said in a recent interview with Bloomberg that “Japan is way ahead in 3G”. – therefore, although this title is clearly provocative, it’s clearly worthwhile examining this question. With the sale of Vodafone KK to SoftBank last week, the timing of this briefing was particularly interesting. My presentation discussed the following questions:
March is the month when new subscriptions peak in Japan. During March 2005 around one million new subscribers signed up for mobile services in Japan, the net gain (new subscriptions minus cancellations) was 930,500. New subscribers were shared as follows between carriers:
Japan’s mobile subscriber numbers for Feb 2005 came out yesterday…
DoCoMo is ahead again after a soft period on the strength of services and handsets, and KDDI/AU is still going strong driven by the designer series, good tariffs/discounts, music, WIN etc.
Willcom (the former DDI-Pocket) is strengthening under new management, new name and new campaigns and network upgrades, TuKa is falling back after it’s great “TuKa-S” success… and Vodafone succeeded to stabilize subscriber losses somewhat which is a mild step in the right direction and might be the first indication of Mr Tsuda’s influence…
Stimulated by the needs of our customers, who need to roll out services across the networks in Japan, we have started market surveys, interviewing mobile phone customers of all kinds on Tokyo’s streets in “focus groups”, as we do when required for our customers to get a feel for the market. I always make a point to take part personally in such consumer research, and often do some myself. In the case of mobile phone habits, the first approach at interviewing just reflects back the messages of the commercials and publicity campaigns. Only in-depth interviewing and discussion then reveals the real thoughts which are normally quite different. We learnt a lot about what average Japanese consumers think about DoCoMo, AU and Vodafone, building up a good picture. But the numbers also tell a clear story:
NTT investments to defend NTT against challengers KDDI and Softbank
KDDI and SoftBank challenging NTT’s dominating position in Japan’s telecom sector
Softbank is rapidly becoming the third universal telco in Japan, targeting NTT’s most important income streams. KDDI of course is also targeting NTT’s fixed line income.
NTT plans to intensify its defensive battle
On November 2, 2004, NTT announced plans to compete: NTT will invest 5 Chou YEN (YEN 5000 Billion = US$ 45 Billion) over 6 years (2005-2010), i.e. about US$ 7.5 Billion/year. 60% of this investment will be for optical IP networks. NTT plans to build about 30 million FTTH lines.
updated most statistics and graphs
added a section on mobile games on i-mode
updated the international section
updated the 3G section
updated the i-mode-FeliCa wallet-phone section
corrected many errors updated the section on Japan’s telecom landscape: added recent transactions, and updated graphics
which quotes ITU’s 2000 vision for 3G (ITU = International Telecommunication Union):
The device will function as a phone, a computer, a television, a pager, a videoconferencing centre, a newspaper, a diary and even a credit card…it will support not only voice communications but also real-time video and full-scale multimedia. It will automatically search the internet for relevant news and information on pre-selected subjects, book your next holiday for you online and download a bedtime story for your child, complete with moving pictures. It will even be able to pay for goods when you shop via wireless electronic funds transfer. In short, the new mobile handset will become the single, indispensable “life tool”, carried everywhere by everyone, just like a wallet or purse is today.
Interestingly, every single detail of ITU’s 2000 3G-vision has now been realized now by DoCoMo in Japan.