Japan: Wireless Multimedia Market

Operator competition in the Japanese wireless market intensified in the latter part of 2006, in part as a result of the introduction of mobile number portability. Voice tariff cuts by Softbank Mobile (formerly Vodafone KK) garnered considerable headlines, yet KDDI's au unit gained the most in the initial weeks, with a range of handsets and services that is still viewed as superior.

Japan's first new mobile market players in 12 years launch in the first half of 2007; however, eMobile, YOZAN and IPMobile will focus on the wireless data access market initially, rather than consumer services and multimedia. Amongst the big three operators, flat-rate data plans are becoming the norm: NTT DoCoMo and KDDI alone recorded 15 million flat-rate users at September 2006. Flat-rate customers at Softbank will grow as part of its converged Yahoo! services push, and we also expect NTT DoCoMo to bow to competitive pressure and offer a tiered flat-rate offering in 2007. In January 2007 it introduced separate flat-rate plans for full-browser users.