Tag: MNP

  • Mobile Number Portability (MNP) in Japan

    Mobile Number Portability (MNP) in Japan

    Mobile number portability created winners and losers in only two months – the main business challenge for Japanese operators is to avoid a price war.

    KDDI is the clear winner in the first round, DoCoMo suffers a setback, and SoftBank (which acquired Vodafone-Japan) did better than expected.

    Today we released the 23rd edition of our JCOMM-Report – about 250 pages of overview and analysis of Japan’s telecom sector.

    KDDI gains 524,000 subscribers in Oct & Nov 2006. DoCoMo for the first time ever since it was founded experienced a net loss of subscriptions.

    Net gain/loss of Japan's mobile operators at introduction of mobile number portability (MNP)
    Net gain/loss of Japan’s mobile operators at introduction of mobile number portability (MNP)

    KDDI gains 600,000 new EZweb subscribers, Japanese operators earn much from mobile internet – subscription data show even better results for KDDI‘s EZweb.

    gain/loss of subscriptions by Japanese mobile internet services during introduction of mobile number portability (MNP)
    gain/loss of subscriptions by Japanese mobile internet services during introduction of mobile number portability (MNP)

    Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

  • Mobile number portability in Japan: SoftBank’s Zero YEN campaign

    Mobile number portability in Japan: SoftBank’s Zero YEN campaign

    Mobile number portability was a major factor forcing Vodafone out of Japan

    MNP is the first challenge for SoftBank Mobile – read how SoftBank approaches the MNP battle

    Mobile number portability (MNP) was introduced in Japan on October 24, 2006. Mobile number portability means that Japanese cell-phone subscribers (excluding PHS subscribers) can move their subscriptions between DoCoMo, KDDI/AU and Softbank while keeping the same phone number. However, number portability does not mean email portability, or portability of purchased content which in Japan is normally subject to strict digital rights management and normally cannot be transfered from one subscription to another.

    SoftBank went into the MNP battle with fireworks of campaigns

    1. The “Zero YEN” campaign plays with the fire of a price war. As shown in the photograph below, from October 24, 2006, SoftBank stores prominently displayed “Zero Yen” prices for all handsets and many different services, creating the superficial impression that suddenly all SoftBank handsets and services are free of charge, which of course is not the case. This advertising trick led to an enquiry by Japan’s fair trade commission. The fair trade commission later admonished SoftBank saying that some aspects of the campaign were misleading – however the fair trade commission at the same time admonished all other cell phone operators and PHS operator WILLCOM for different types of misleading advertising. SoftBank came away quite lightly – however the photograph below shows, that the ZERO YEN signs were covered up (and are still visible below the hastily applied cover sheet of paper).
    2. The “unexpected campaign”: Softbank introduced an “unexpected” Gold Plan, which offers essentially flat fee voice calls under certain conditions, but restricted in time and length, and also restricted to calls between SoftBank subscribers only. Since SoftBank only represents about 15% of Japan’s mobile phone market, it is much easier for SoftBank to offere flat on-network plans, than for DoCoMo, since for DoCoMo a much larger ratio of calls would fall under the on-network plan. DoCoMo and KDDI therefore did not respond with any flat voice on-network plans.
    3. SoftBank’s computer systems were either overloaded, or broke down under the load of MNP, leading to irritated complaints by KDDI and DoCoMo, and some damage to the new SoftBank brand.

    SoftBank Zero Yen campaign

    This photograph shows SoftBank’s Zero Yen Campaign (left photograph). AFter a few days Japan’s Fair Trade Commission started to investigate SoftBank (and all other mobile operators) and admonished them for misleading advertising practices – as a consequences the original Zero Yen poster is covered up (right hand photograph):

    Mobile number portability in Japan: SoftBank's Zero YEN campaign
    Mobile number portability in Japan: SoftBank’s Zero YEN campaign

    Preview – SoftBank today and 300 year vision report:

    Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

  • Mobile Number Portability (MNP) in Japan

    Mobile Number Portability (MNP) in Japan

    Mobile Number Portability (MNP) started in Japan on October 24, 2006

    Mobile Number Portability increased competition between mobile operators and forced Vodafone to give up in Japan and sell to SoftBank

    On October 24, 2006 Japan’s government regulators order the mobile phone operators to introduce number portability (MNP).

    KDDI/AU seems to be the winner in the MNP race

    The consensus has emerged in our community that KDDI/AU will probably be the winner when MNP is introduced.

    We believe that KDDI/AU is certainly the most successful company globally in the 3G (=UMTS) sector.

    Interestingly, KDDI/AU uses the CDMA2000 3G/UMTS standard, which has been excluded from Europe. European telecom manufacturers have mostly abandoned the CDMA2000 standard for 3G/UMTS, as our company has recently studied and analyzed in detail in a project contract for the Government of the European Union, and outlined to the 25 EU Technology Attaches in Japan.

    Mobile Number Portability (MNP) in detail

    From Oct 24, 2006 Japanese mobile phone operators are required to enable their customers to change mobile phone operator while keeping the same mobile phone number.

    Number portability – not email address portability

    While GSM countries use SMS for messaging, subscribers in Japan use almost exclusively mobile email and not SMS. (As we have recently explained to the 25 EU technology attaches, mobile email is much more advanced, much more convenient, much cheaper, has much more functionality and is much more open than SMS, which is generally used outside Japan). However, mobile email addresses in Japan are of the format [user selected artificial name]@[name of mobile operator].ne.jp, and therefore specific to the operator. Government does not require mobile email portability.

    Mobile digital rights management (mobile-DRM)

    for content in Japan is relatively strict and in general music, JAVA applications and other digital content, and many other services are not portable between mobile operators.

    The process of changing from one operator to another has been made very smooth for consumers. The termination fee is generally YEN 2000 (about US$ 17) and is refunded by the operator welcoming a moving subscriber, at least during temporary MNP campaigns.

    Impact of MNP sector by sector:

    Mobile operators

    The consensus is that KDDI/AU will be the winner in attracting subscribers both from DoCoMo and SoftBank – and correspondingly KDDI’s share price has increased recently substantially, while DoCoMo’s share price has fallen over the last two years, as shown in our JCOMM report.

    Mobile operators: Vodafone KK

    MNP was without doubt the major direct reason which forced Vodafone to give up in Japan, and sell Vodafone KK (Vodafone’s operating company in Japan) to SoftBank. Read here for a detailed explanation why Vodafone gave up in Japan and sold to SoftBank.

    Masayoshi Son has of course won many battles in his life, and we expect Son’s SoftBank-Mobile to be a “wild card” in the MNP game. One of Son’s strategies recently is to partner with famous brands including SHARP/AQUO, and iPod. For example SoftBank has announced an iPod phone in cooperation with Apple Computer, and recently offered a discounted mobile phone/iPod package when a subscriber purchases a 2 year subscription.

    Handset makers

    In Japan mobile phone handsets are locked to the mobile operator. It is not possible in Japan to use the mobile phone of one operator on a different network. Increased churn due to MNP therefore is good news for handset manufacturers, and we expect handset sales to increase.

    Mobile content

    Our recent Mobile Payment and Keitai Credit report also covers mobile content and mobile commerce, and shows that mobile commerce has recently exceeded mobile content. Generally, we expect a negative impact of MNP on mobile content (not mobile commerce). The reason is that many mobile content subscriptions are “dormant”. For example, mobile music in Japan is sold in monthly subscriptions. Our mobile music report estimates in detail the ratio of mobile music consumers in Japan pay for, and the (substantially smaller) amount of mobile music actually downloaded. We have deduced this ratio by detailed analysis of Japanese mobile music industry data. When a subscriber changes from one mobile operator to another, the content subscription does not move along to the new operator, but the subscriber has to actively subscribe fresh again. We expect that subscribers will at this point take the opportunity not to freshly subscribe to those content programs where they were “dormant” subscribers, i.e. those where they paid US$ 3 or US$ 5 per month without actually downloading any content. This negative effect may be balanced by a smaller amount of additional purchases of music and content, which has expired due to digital content management conditions, which do not allow purchased content to be moved to a different handset (although the mobile phone number is the same).

    Japan telecommunications industry report

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