Help - my mobile phone does not work! - Why Japan's mobile phone sector is so different

©2006 Eurotechnology Japan KK www.eurotechnology.com
JCOMM - Japan’s Telecom Markets March 21, 2006Finnish Chamber of Commerce FCCJ March 16, 2007
©2007 Eurotechnology Japan KK www.eurotechnology.com1
Gerhard Fasol PhD
fasol@eurotechnology.com
Eurotechnology Japan K. K.
www.eurotechnology.com
(This is a strongly abbreviated outline version of the presentation)
Finnish Chamber of Commerce in Japan
March 16, 2007
“Help - my mobile phones does not
work!”
Why Japan’s mobile phone sector is so
different to Europe’s

Agenda
!Handset market shares
!When European’s and Japanese talk about
“Broad Band” they don’t mean the same
thing
!Japan’s mobile phone market
"No GSM - but a lot more
!What can we learn from the Vodafone-Japan
tragedy

Japan’s mobile phone market:
20% - 25% of the world market
an Open market -
and one of the most competitive
!NOKIA’s market share in Japan:
"About 0.3% (Eurotechnology’s estimation)
!NOKIA’s market share outside Japan:
"About 35%

! NOKIA’s start in Japan: 1989
"(Gerhard Fasol’s start in Japan’s telecom sector: 1984
- can we help?)

! Fixed and wireless internet bandwith is the live-blood of our
information society
! Both fixed and wireless internet connectivity is in general much higher
bandwidth and much cheaper in Japan than in Europe
! In recent years most innovation is invented or first to market in
Japan, and comes to Europe 2-5 years later
! Sources:
"Eurotechnology Japan KK benchmarked in detail Japan’s vs.
Europe’s telecom sector in a contract for the Commission of the
European Union
"See also Gerhard Fasol’s briefing for the 25 EU science and
technology attaches in April 2006 - download pdf-file of the
presentation here: http://store.eSellerate.net/eurot/euattaches
Japan is 2-3 years ahead of EU

When Europeans and Japanese talk about
“Broad Band” they don’t mean the same thing…
! Source: http://www.eurotechnology.com/jcomm/
! And http://store.eSellerate.net/eurot/euattaches/

Japan’s internet is MUCH cheaper than in Europe

In recent years most innovations in the mobile phone
sector are invented or first to market in Japan -
come to Europe about 3++ years later

“SMS have soared in UK to a
Staggering 93.5 Million SMS/Day”
! The Mobile Data Association (MDA) announced in a press release on November 25th, 2005 under
the headline "Text messaging soars during October" that SMS sent in the UK during October
2005 "have soared ... to a staggering ... 93.5 million SMS/day".
! Mobile email in Japan is more “staggering” than SMS in Europe
! Source: http://www.eurotechnology.com/jcomm/
! And http://store.eSellerate.net/eurot/euattaches/

E-Japan (Prime Minister’s office)
! Transform Japan into the most advanced IT nation by 2005
! Make Japan into a global IT leader
! eJapan
! uJapan
! For details on the e-Japan and u-Japan policy see: "Japan's
mobile phone industry and u-Japan" (Talk at the EU-Japan
Center for Industrial Cooperation, Tokyo, Oct 12, 2006),
download pdf-ﬁle here:
http://store.eSellerate.net/eurot/eu12oct2006

Japan’s telecom landscape
! Open
! New entrants
"SoftBank: http://www.eurotechnology.com/store/softbank/
"eAccess/eMobile:
http://www.eurotechnology.com/store/emobile/
! Consolidation, spin-outs, restructuring
! Open competition
! For a detailed overview of Japan’s telecom landscape with
graphics and quantitative market information see:
"http://www.eurotechnology.com/store/jcomm/

! 1Gigabps FTTH for YEN 3000/month true-ﬂat (EURO 20-30/month)
! No GSM, but:
" PHS, PDC, wCDMA, UMTS, HSPDA, CDMA-1X, CDMA2000-1X
" CDMA2000-1X-EVDO : 6-times faster than UMTS in Europe
" More than 50% 3G
! Consolidation vs new entrants:
" SoftBank emerged as one of the world’s largest universal telco
#See: http://www.eurotechnology.com/store/softbank/
" eAccess/eMobile
#See: http://www.eurotechnology.com/store/emobile/
" SPECTRUM LICENCE FEES = ZERO
! Successful Willcom turn-round
! The world’s most successful 3G operator: KDDI
" CDMA2000-1X-EVDO : 6-times faster than UMTS in Europe
" See: http://www.eurotechnology.com/store/kddi/
! For a detailed overview of Japan’s telecom landscape with graphics and quantitative
market information see:
" http://www.eurotechnology.com/store/jcomm/
Key trends and characteristics

No GSM - but a lot more…
! See our reports:
"http://www.eurotechnology.com/store/softbank/
"http://www.eurotechnology.com/store/kddi/
"http://www.eurotechnology.com/store/imode/
"http://www.eurotechnology.com/store/mobilepayment/
"http://www.eurotechnology.com/store/emobile/
"http://www.eurotechnology.com/store/walletphone/

No saturation in view:
Japan’s mobile phone industry is
Growing by several Finlands / year
! For quantiative data see:

! Established operators: about US$ 20 billion/year
! PLUS: about US$ 6 billion by new entrants
! See: http://www.eurotechnology.com/store/jcomm/
Operators invest US$ 20++ Billion/year

mCommerce is Reality
! http://www.eurotechnology.com/store/mobilepayment/

! More on mobile payments and mobile credit:
http://www.eurotechnology.com/store/mobilepayment/
! More on wallet phones:
http://www.eurotechnology.com/store/walletphone/
! More about SUICA and PASMO - electronics/ mobile ticketing and
cash: http://www.eurotechnology.com/store/suica/
Private sector competes freely
to create electronic money

What can we learn from the
Vodafone Tragedy?
Do YOU know why Vodafone failed
in Japan?
Do you want to know?

Vodafone in Japan
what can we learn?
! A…(see talk)
! A…(see talk)
! A… (see talk)
! market research ???
! investments ???
! handsets
! Human resource issues
! “Corporate cookie-cutter”
! …(for more info please come to my talk or contact us, or
see our Softbank report:
http://www.eurotechnology.com/store/softbank )

Why did Vodafone Sell?

Who wants
Cheese phones?

Summary

Summary
! Japan’s handset market is about 25% of the world market
! Japan’s market is open
! Japan’s handsets and mobile phone networks are about 2-4 years
ahead of Europe
! Most innovation is ﬁrst to market in Japan
! To win in Japan as a foreign company
"you have to do what it takes…
"arrogance does not help
"global cookie cutter methods don’t work
"“global methods” don’t help to understand the market

More information:
!Blogs:
"http://fasol.com/blog/
"http://eurotechnology.com/blog/
!Reports:
"http://www.eurotechnology.com/store/

Eurotechnology Japan KK
!Why reinvent the wheel in Japan?
!We build on 22 years of experience with
Japan’s telecom sector
!We build the Japan business for European
high-tech companies
!We help European companies acquire
companies and factories in Japan
!We advise corporations and Governments on
strategy
!We work for major investment banks

Contact
! Eurotechnology Japan KK
! Shinagawa Intercity Tower A 28F
! 2-15-1 Konan, Minato-ku
! Tokyo 108-6028, Japan
! Tel +81-3-6717-4160
! FAX +81-3-6717-4141 and +81-3-5477-7044
! http://www.eurotechnology.com/
! CEO: Gerhard Fasol PHD
! Fasol@eurotechnology.com
! Mobile: +81-90-8594-6291

Help - my mobile phone does not work! - Why Japan's mobile phone sector is so different

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Help - my mobile phone does not work! - Why Japan's mobile phone sector is so different