mobikyo kk presentation to radio diversity round table 16 nov 2009

8/14/2019 Mobikyo KK presentation to Radio Diversity Round Table 16 Nov 2009

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International Round Table on Radio DiversityChallenges to the European Single Standard Solution

16 November - 2009

The Business of Mobile in Japan

Lars Cosh-Ishii & Daniel Scuka :: Mobikyo K.K.


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This Presentation Breaks into Four Main Sections

A Current and General Overview of the Market in Japan Description of the Existing and Future Mobile Platforms Observations based on the Applicable Key Lessons Learned Suggestions on how EU might Plan Forward for Next Steps

We hope the effort to describe our current environment, the eco-system, along with some of the near future evolution plans, willprovide food for thought based on a working model of which someportions could easily migrate into other markets.

Perhaps starting with this quote from William Gibson would behelpful:

the future is already here - it is just unevenlydistributed

We have been following your future here in Japan for the last 10-years!
http://www.mobikyo.jp/


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What are the Key Lessons Japan can Share with the Empire?


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The Mobile Value Proposition

This a unique combination of

a keyboard, display panel and

voice connection in All Pockets

That truly has combined power

Anywhere - Anytime - Anyone

Think about the impact that

each of these legacy tools had.

However.. In Japan we see >>


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The success of mobile in Japan is because of its unique userculture..
http://www.mobikyo.jp/http://www.mobikyo.jp/


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NOT..!!!


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Results are driven by a Unique Business Model culture


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Japanese Mobile Ecosystem


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Japanese Mobile Ecosystem :: Replicated


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Source: Telecommunications Carriers Association

Subscribers, Data Plans, Revenues and NetworksThe total net new subscriber additions has kept pace at just under 10 percent growth YoY between 2002 and 2008. As

all handsets are sim-locked to the respective operator, the figures below represent actual devices sold.

DoCoMo had shown constant early gains of net 2m plus subscribers per year, however its dominant position oftotal market share has continued to trend downwards in the face of increased competition.

While J-Phone was keeping early pace with KDDI, it flat-lined for several years when acquired by Vodafone. It has

managed an impressive bounce-back in the last two years under the new owners as SoftBank Mobile.

KDDI has continued to demonstrate strong and steady growth due in part to it's superior data speeds and pioneer

position of introducing flat-rate data plans combined with an aggressive pursuit of the youth and music markets.


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In late 2003 KDDI broke ranks with the competition and launched its WIN flat-rate date service[1]. The company then

rolled-out a blitz ad-campaign and gained significant new subscriber adds over the following six months before

DoCoMo finally respond with their own version in June 2004[2] . Within mere weeks of the belated DoCoMo launch,KDDI came back with its so-called Double-Flat package (see figure below) and continues to frustrate the embattled

incumbent. It should be noted that the WIN campaign never mentioned 3G and their flat-rate data plan was not

optional. The latest figures show just over 65 percent of KDDI customers are now WIN subscribers.

[1] http://www.kddi.com/english/corporate/news_release/2003/1022/index.html

[2] http://www.nttdocomo.com/pr/2004/001159.html

[2] http://www.softbank.co.jp/en/news/release/2007/070508_0001.html

Meanwhile, Vodafone was still under

intense pressure to build its network

and it wasnt until SoftBank took

over, and launched its own White

Plan[3] that the #3 telco started to

make any significant headway in this

area.

However, this move included on-net

voice calls and was clearly the major

contributor to their continued wins of

the on-going net subscriber additions

war for 18-consecutive months.

All three carriers FYE 2007 results

show that almost 40% of the entire

base is now on a flat-rate data plan.

While increased data arpu has not

covered the downward tend in voice

revenue it has helped off-set losses.

Subscribers, Data Plans, Revenues and Networks
http://www.kddi.com/english/corporate/news_release/2003/1022/index.htmlhttp://www.nttdocomo.com/pr/2004/001159.htmlhttp://www.softbank.co.jp/en/news/release/2007/070508_0001.htmlhttp://www.softbank.co.jp/en/news/release/2007/070508_0001.htmlhttp://www.nttdocomo.com/pr/2004/001159.htmlhttp://www.kddi.com/english/corporate/news_release/2003/1022/index.htmlhttp://www.mobikyo.jp/


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As in most markets, the continued downward trend of voice ARPU in Japan is an on-going concern as data revenues

have not managed to offset voice loses. While the running costs of the operators networks should also be factored in,

building vs. maintaining, industry pundits suggest that an average Profit per user would be a more valuable metric.

International carriers sell 160 character SMS at prices ranging from 10 to 20 euro-cents per message, up to 50-cents in

the U.S., while users in Japan pay via packet data charges - resulting in prices as low as 1-Yen per message - with no

limitations in the number of characters and can also be exchanged with PC users. This distinction in the calculation of

data ARPU - messaging vs. surfing - should not be over-looked when making overseas comparisons. Note, Japanese

data revenues have recently reached 50 percent of the income generated by voice. Results by operator blended

below.

Source: Public sources from each company rounded thousands Yen per month - FYE 2008 [March 31st 2009] estimated

Subscribers, Data Plans, Revenues and Networks


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Subscribers, Data Plans, Revenues and NetworksIn the march towards next-generation networks, under the industry term LTE (long-term evolution), DoCoMo is aiming

to deploy the Super3G platform by mid-fiscal 2010, with downlink speeds of 300 Mbps and uplink of up to 75 Mbps,

following the agreed specs set by 3GPP. While the new offerings will continue to utilize existing 3G spectrum, two new

technologies - OFDM and MIMO - are expected to significantly improved performance. The core of Super3G access

will be all-IP networks, which could be easily configured for more advanced 4G radio access systems in the future.

[http://www.nttdocomo.com/technologies/future/super/index.html
http://www.nttdocomo.com/technologies/future/super/index.htmlhttp://www.mobikyo.jp/http://www.nttdocomo.com/technologies/future/super/index.htmlhttp://www.mobikyo.jp/


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Total Subscribers:55.3M

i-Mode Subscribers:48.6M

3G Subscribers:51.4M

Operators: Total Subscribers, Data Plans and 3G Contracts

TotalSubscribers:

31.2M

EZ WebSubscribers:

26.5M

3G Subscribers:30.9M

Total Subscribers:21.4M

Yahoo!Subscribers:

16.8M

3G Subscribers:

20.4MTotal Subscriber Base:

--108M

Total Data Subscribers --92M

Total 3G Contracts --

Estimated 3G vs. 3.5G Subs @60/40

Estimated Flat-Rate Data Subs+50%

Pure Data ARPU - BlendedSource: Telecommunications Carriers Association - October 2009


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Japan Mobile: Key Metrics on Operators Data ARPU


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Japan Mobile: Key Metrics on Operators Data ARPU

Three Japanese operators still have slightly higher combined

data ARPU compared to US despite the Subscriber base

AND that is pure data as messaging here is essentially free!


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The mobile functions and services used on a daily basis - results below - via the annual survey conducted by CIAJ.

Japan Mobile: Key Metrics on Average User Behavior


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Conclusions - A World Beyond SMS

Japanese operators demonstrate a smart-pipeapproach.

Building stable high-speed networks and bundlingreasonableflat-rate data plans has enabled the telcos to

generate stable and growing sources of non-voicerelated income. See AT&T.

Encourage 3rd party partners in advertising Establish micro-billing for sales %commission Manage analytics monetize based on results

The revenue share from billing and settlement fromincreased content and service sales combined withbuffet-style secured monthly data arpu also provides

future options base to tap into.


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Conclusions - Competition = Innovation

While certain efficiencies are obviously gained byfollowing set standards, there are also several worthycompeting platforms to consider. The next generationof wireless networks provides an opportunity toexplore potential benefits offered based on real worldadoption. Allowing markets to decide will enable the

best of breed to prove it's merit based on actualresults with an added bonus of managing stagnanttendencies of a monopoly winner.

Engage Disruptive Players

Certainly it would make sense to make availablespectrum for energetic entries that coulddemonstrate innovative approaches and viablealternatives to keep the incumbent operators honest.By making it clear, as guardians of the public trust,that regulators will not accept the cartel mindsetthese new players may also be the most valuable


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Suggestions - Next Steps to Consider

Certain comfortable parties, with vested interest andpowerful connections, clearly prefer the status quo when it suits them. Perhaps a lobby to have a portionof existing spectrum auction funds set aside toenable independent research is a 1st step..?!?

Academic institutions with credibility and existingresources should step forward with an overview toexplore alternatives, using comparable businessverticals and financial models, with talented partnersbased in several markets around the world.

Raising awareness - therefore support - for anapproach that serves all stake-holders; community,industry and regulators, through collaborative digitalcampaigns with conferences and media exposure todetermine the best possible solutions.

Engagement and support for the smaller players who


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Only One -- But the Light Bulb has to Want to Change!


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Thank-You!

Lawrence Cosh-Ishii

Representative DirectorMobikyo K.K.

E: [email protected]: www.mobikyo.jpM: +8180-3174-8847

T: +8103-5322-2927
mailto:[email protected]://www.mobikyo.jp/http://www.mobikyo.jp/http://www.mobikyo.jp/mailto:[email protected]


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mobikyo kk presentation to radio diversity round table 16 nov 2009

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