3Q.2011 Japan Mobile Operator ForecastJapan to have 136 million mobile subscriber connections in 2015 with NTT DOCOMO taking 44.8% market share

October 2011

2

© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

Chart 1: Subscriber Growth (4Q08 – 2Q11), %

-50%

0%

50%

100%

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

NTT DOCOMO KDDI SOFTBANK MOBILE WILLCOME EMOBILE Industry Total

INDUSTRY AVERAGE SUBSCRIBER GROWTH IN THE JAPANESE WIRELESS MARKET WAS 6.5% IN THE LATEST QUARTER

The operator-wide average subscriber growth (YoY) was 6.5% in 2Q.2011, up from 4.0% in 2Q.2010.

Subscriber growth at SOFTBANK remains the highest among the top 3 operators in Japan. SOFTBANK’s subscriber growth (YoY) was 15.9% in 2Q.2011.

The largest operator, NTT DOCOMO, saw its subscriber growth (YoY) rise from 3.0% in 2Q.2010 to 3.4% in 2Q.2011.

Also, WILLCOM’s subscriber growth jumped from -14.4% in 2Q.2010 to 2.9% in 2Q.2011.

EMOBILE is a relatively new operator which entered the Japanese mobile operator space in 2005. Its subscriber growth rate in 2Q.2011 was 31.7%.

Stable subscriber growth continues in Japan6.5% industry average subscriber growth in 2Q.2011

3

© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

Chart 2: ARPU Growth (4Q08 – 2Q11), %

ARPU growth in Japan remains negative-5.9% industry average ARPU growth in 2Q.2011

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

NTT DOCOMO KDDI SOFTBANK MOBILE EMOBILE Industry Total

THE AVERAGE ARPU IN JAPAN CONTINUES TO DECLINE

The industry average monthly ARPU was US$ 58.46 in 2Q.2011, down -5.9% YoY.

At the operator level, NTT DOCOMO continues to have negative ARPU growth at -4.4% in 2Q.2011 (down from -4.6% in 2Q.2010).

SOFTBANK MOBILE’s monthly ARPU rose by 1.9% (YoY) to reach US$ 52.33 in 2Q.2011.

We note that EMOBILE’s ARPU (US$35.55 in 2Q.2011) is much lower than the other operators’ ARPUs. This is partly because, when EMOBILE entered the market, its strategy was to depart from traditional operators’ models where voice was the main business; EMOBILE based its market entry exclusively on mobile broadband data provision.

4

© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

Chart 3: MOU/Sub Growth (4Q08 – 2Q11), %

Minutes of Use per Subscriber is decreasingIndustry average MOU/Sub is 136 minutes per month

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

NTT DOCOMO KDDI Industry Total

The operator-wide average Minute of Use (MOU) per subscriber was 136 minutes per month in 2Q.2011, down -2.6% YoY.

MOU/Sub at KDDI was -0.7% in 2Q.2011, down from 10.1% in 2Q.2010.

MOU/Sub at KDDI continues to be higher than MOU/Sub at NTT DOCOMO.

MOU per subscriber at KDDI and NTT DOCOMO was 151 minutes and 128 minutes respectively in 2Q.2011.

5

© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

Chart 4: EBITDA Growth (4Q08 – 2Q11), %

Strong EBITDA growth at SOFTBANK in 2Q.2011

-40%

-20%

0%

20%

40%

60%

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

NTT DOCOMO KDDI SOFTBANK MOBILE Industry Total

+5.2% INDUSTRY-AVERAGE EBITDA GROWTH IN 2Q.2011

• The industry average EBITDA growth rate (YoY) in 2Q.2011 was 5.2%, up from 0.3% in 2Q.2010.

• EBITDA growth rate (YoY) at SOFTBANK MOBILE was 14.5% in 2Q.2011 (down from 30.7% in 2Q.2010).

• EBITDA growth rate (YoY) at NTT DOCOMO was 6.4% in 2Q.2011 (up from -6.4% in 2Q.2010).

6

© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

Chart 5: Subscribers by operator (CY09 – CY15)

So what is IEMR’s Forecast? Total subscriber connections to reach 136 million in 2015

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

CY09 CY10F CY11F CY12F CY13F CY14F CY15F

subs

crib

ers

(000

s)

NTT DOCOMO KDDI SOFTBANK MOBILE

WILLCOM EMOBILE

We forecast that the number of total wireless subscriber connections in Japan will increase from 120.7 million in the end of 2010 to 136 million in the end of 2015.

Given the latest quarter numbers, our model predicts that NTT DOCOMO will have approximately 61 million mobile subscriber connections in 2015.

In our view, NTT DOCOMO will continue to hold a dominant position as the largest mobile operator in Japan with a 45% market share in 2015.

On the other hand, we forecast that KDDI will have 35.4 million wireless subscribers in 2015 (26% market share).

7

© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

Chart 6: Average Revenue per User (ARPU) per month (CY09 – CY13F), JPY

So what is IEMR’s Forecast?ARPU levels in Japan to decline

0

1,000

2,000

3,000

4,000

5,000

6,000

CY09 CY10F CY11F CY12F CY13F

Japa

nese

Yen

(¥)

NTT DOCOMO KDDI SOFTBANK MOBILE EMOBILE Average

WE EXPECT THE OPERATOR-WIDE AVERAGE ARPU LEVEL TO DECLINE TO ABOUT JPY 4,600 IN 2013

We expect that ARPUs in Japan will be declining over the next two years.

Our forecasting model predicts that the industry average ARPU will be JPY 4,618 per month in 2013.

We expect that NTT DOCOMO’sARPU level will continue to be higher than those of SOFTBANK MOBILE and EMOBILE over the next two years.

8

© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

Chart 7: EBITDA margins (CY09 – CY13F), %

So what is IEMR’s Forecast? Stable profitability at NTT DOCOMO, KDDI, and SOFTBANK MOBILE

0%

10%

20%

30%

40%

50%

60%

CY09 CY10F CY11F CY12F CY13F

NTT DOCOMO KDDI SOFTBANK MOBILE EMOBILE Average

We forecast that EBITDA margins at the largest three operators will be stable over the next few years.

We forecast that NTT DOCOMO’sEBITDA margin will be about 48% over the forecast period.

KDDI’s EBITDA margin will remain lower than those of its competitors at about 42% from 2012 to 2013.

9

© 2011 IE Market Research Corp.All rights reserved.

IE Market ResearchWhat do we do?

We Drive Enterprise Strategy in the telecoms domain by:

Producing the BEST and most COMPREHENSIVE strategy coverage of the vendor and operator space in the world

With over 800+ operators and 50+ vendors, we cover the strategies of more telecom operators, vendors, and markets than ALL of our competitors

1010

About IEMR

Blue Chip client base of over 100 customers across core telco value chain . . .Operators OEMs / ODMs Network Infrastructure

Vendors

© 2011 IE Market Research Corp.All rights reserved.

1111

About IEMR

And over 200 consulting and financial services institutions are IEMR customers

© 2011 IE Market Research Corp.All rights reserved.

12

© 2011 IE Market Research Corp.All rights reserved.

Thank you for reading our report. If you liked what you read, please let people know about this site by linking to us from your own website. Just

copy the html code below and paste it either into a sidebar widget or a post on your own site. It would be much appreciated!

Here is the code to copy/paste: <a href="https://www.iemarketresearch.com/Members/Reports/3Q11-Japan-

Mobile-Operator-Forecast-2011--2015-Japan-to-have-136-million-mobile-subscriber-connections-in-2015-with-NTT-DOCOMO-taking-44-8-market-share-

RID2705-1.aspx">Japan Mobile Operator Forecast</a>

© 2011 IE Market Research Corp.All rights reserved.

13

© 2011 IE Market Research Corp.All rights reserved.

If you would like to purchase the full report together with the detailed Excel sheets and forecasts, please click here and sign

up as a member client. You can also call us at +1 604 327 4367 or email us at

info@iemarketresearch.com

© 2011 IE Market Research Corp.All rights reserved.

14

© 2011 IE Market Research Corp.All rights reserved.

IE Market ResearchDisclaimers and Disclosures

Dissemination of ResearchIEMR endeavours to make all reasonable efforts to provide research simultaneously to all eligible clients. However, IEMR’s premium clients may have access to IEMR research prior to research being disseminated more widely. IEMR’s research is posted to our proprietary website to ensure eligible clients receive intelligence in a timely manner. Additional distribution may be done by IEMR’s sales personnel via email, fax or regular mail. Clients may also receive our research via third party vendors. Please contact our research department at 1-888-322-IEMR for more information regarding our research.

Licensing AgreementAny survey data, forecasting data, and research reports and the information contained therein are the intellectual property of IEMR, and permission to use the same is granted on a single-user or multi-user basis to all Clients. IE Market Research Corp. will not distribute in any way, shape, or form results of contract research that would, in any way, harm the competitive position of its Client.

IE Market Research Corp. will be entitled to the copyright in all reports and other documents or electronic media produced by it in connection with work undertaken independently of any Client contract. In performing services, IE Market Research Corp. may use without limitation any of its property including hardware, software, IE Market Research Corp.’s proprietary products and confidential information and trade secrets of IE Market Research Corp. Such property will remain the property of IE Market Research Corp. and the Client shall acquire no right or interest in it.

IEMR’s licensing agreement is perhaps the most liberal in the industry. Two licensing options are available for our Clients:• Single-user License: Allows Clients to read, print, and distribute printed copies of IEMR survey data, forecasting data, and research reports (and all purchased elements therein) within the Client’s organization, provided that IEMR is cited as the source. Clients are also allowed to use and manipulate this data for their internal corporate purposes, provided that IEMR is cited as the source. A Single-user License does not give the Client the right to electronically distribute IEMR survey data, forecasting data, and research reports to any other individual either within an organization or outside it.• Multi-user License: Allows Clients to read, print, and distribute printed and electronic copies of IEMR survey data, forecasting data, and research reports (and all purchased elements therein) within the Client’s organization, provided that IEMR is cited as the source. Clients are also allowed to use and manipulate this data for their internal corporate purposes, provided that IEMR is cited as the source. A Multi-user License does not give the Client the right to distribute IEMR survey data, forecasting data, and research reports to other individuals outside the Client’s organization.

CONSUMEREADY™ and EXPORTREADY™ are registered trademarks of IEMR. Reproduction of material contained herein, in whole or in part or use for any public purpose is only permitted with the prior approval of IEMR. Courtesy copies of reproduced material are appreciated. Electronic reuse of the data contained herein is strictly prohibited.