"What is hot in mobile in Japan?" (Executive Briefing)

From time to time our CEO is asked to brief top executives of major corporations – or even the President of Germany, or the Vice-Minister of Industry of France.

Several times this year we gave a presentation on “What’s hot in mobile in Japan”.

Copyright·©1997-2013 ·Eurotechnology Japan KK·All Rights Reserved·

Japan media landscape restructuring

Japan media landscape restructuring: Japan's broadcasting is a US$ 40 billion/year industry, and there have been several attempts at restructuring

Japan’s broadcasting is a US$ 40 billion/year industry

There have been many attempts over the years for Japan media landscape restructuring

Japan’s broadcasting markets (commercial TV + NHK + CATV + satellite + AM & FM radio) have annual combined revenues on the order of US$ 40 billion. The main players in this market are five large commercial TV groups and the semi-public NHK.

Media Group TBS attracts uninvited merger proposals

One of these five TV and media groups – TBS – has received an uninvited merger proposal by it’s largest shareholder – the internet portal Rakuten – and in parallel also attracted the Murakami-Fund as an investor.

TBS media group under pressure? and why?

Earlier this year Japan’s Murakami Fund acquired about 7% of the TBS Media Group, and declared that TBS was undervalued and should sell non-core assets, such as real estate and other non-TV / non-media related properties.

Recently, Rakuten acquired about over 20% of TBS shares, making Rakuten the largest shareholder of TBS. Rakuten announced a business plan for a merged Rakuten-TBS Group integrating Rakuten’s internet businesses with TBS’ TV and media operations. Since Rakuten’s stock market valuation is about 35% higher than TBS’ valuation (as of October 24, 2005), Rakuten’s management is expected to dominate a potentially merged group.

TBS’ management is not delighted with the prospect of losing control in this way. In response, three things happened:

  1. TBS management announced cooperations with “stable shareholders” Dentsu, Mitsui Bussan, and Bic-Camera, and non-shareholder Amazon.co.jp, and other Japanese corporations.
  2. The Murakami Fund proposed a management buy-out, which would lead to a delisting of TBS by the Tokyo Stock Exchange, taking TBS private. This possibility was voted down by TBS management.
  3. Livedoor offered support as a (very unlikely) white knight. Given Livedoor’s record of a failed hostile take-over attempt of the Fuji-Sankei media group earlier this year (for details see our report on Japan’s Media industry), it seems to be more than unlikely for TBS to go for Livedoor as a white knight – however no one knows for sure.

At this time the acquisition battle for the TBS Group is in full swing and the final outcome is difficult to estimate. In parallel to the take-over battle, a public discusson by Japan’s industry leaders is examining the desirability of hostile take-overs in Japan.

Report on Japan’s media landscape (150 pages, pdf file):
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Preview – Japan media analysis report:

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Copyright·©1997-2013 ·Eurotechnology Japan KK·All Rights Reserved·

GPS required for mobile phones in Japan from April 2007

Japan’s Internal Affairs and Communications Ministry (Soumusho) is working to change regulations so that GPS is required on Japan’s mobile phones from April 2007.

This move has been expected for some time, but apparently details will be announced later in 2005. Nikkei reports that the accuracy of the location determination should be on the order of 150 meters.

Japan’s police receive about 9 million emergency calls per year, and Nikkei reports that about 1/2 of these are from mobile phones. For emergency calls from fixed line phones the precise location is communicated directly to the police and emergency service operators, however for mobile phones this is not the case, and the operators need to rely on the information given by the (often distressed) caller.

The regulations will require for the mobile operators to communicate the location of emergency callers to the Police and Fire Service emergency center operators.

Already for sometime KDDI sells almost all mobile phones with chips with built-in GPS (from Qualcomm), while all operators in Japan have developed a dense array of location based services which are deeply embedded in many mobile internet services. Today about 20% of mobile phones in Japan have GPS built-in, and we expect this ratio to increase to close to 100% around 2008-2010 (for more information consult our report on location based mobile services in Japan).

Copyright·©1997-2013 ·Eurotechnology Japan KK·All Rights Reserved·