Japanese Mobile Market Forecast, 2008-2011

In 2007 several mobile operators prepared for embracing the next generation communication technologies in Japan. DoCoMo is now planning to commercialize LTE service for the first time in the world by 2010, and its rival SoftBank is aiming to introduce the service about the same time. UQ Communications, a KDDI-led joint venture, and WILLCOM are planning to commercialize BWA-based mobile WiMAX service and next generation PHS service respectively in 2009, which is a year earlier than the planned launch of LTE by DoCoMo.

In terms of platform, the three major operators, DoCoMo, Softbank and KDDI are now developing their own platforms such as MOAP, KCP (KCP+) and POP-i aimed at reducing handset costs through the standardized middleware, and shortening the time of product commercialization. However, the global market is paying more attention to platform openness as seen in the case of Googles Android.

As for services, a lot of user-oriented services were introduced in 2007 in the Japanese market. DoCoMo developed its Osaifu-Keitai business, the mobile wallet service into the credit business, and KDDI unveiled new services on sports and health to attract customers attention. SoftBank, which is attracting customers with low-priced rates and various handset models, has not been able to release eye-catching services while DoCoMo and KDDI have launched services that well reflect their strengths.

Looking at the general trend in price policy, it seems that two-year contracts are becoming common in the Japanese market. In June 2007, DoCoMo introduced a new discount rate plan based on a two-year commitment. SoftBank and KDDI immediately followed the suit. For rate plans, unlike SoftBank and EMOBILE, both KDDI and DoCoMo are not offering free-call (flat-rate) service between those who use the same network. However, it is expected that KDDI and DoCoMo may introduce 24-hour free call service in the future based on their business results, and it is forecasted that free-call service (flat-rate) will be widespread in Japan by 2011.

The Japanese mobile market seems to be reaching the saturation point. In this circumstance, operators are aiming to extend their businesses abroad. However, the market leader DoCoMo is the only operator that has taken some concrete steps. KDDI faces limitations in advancing into the foreign markets and building business partnerships with global companies because it uses CDMA network, which usage is decreasing world-wide. DoCoMos and KDDIs competitor, SoftBank is currently devoting itself to achieve higher share in the domestic market. WILLCOM, for its part, continues to secure corporate alliance with Chinese operators who offer the same PHS service.

The Japanese market had 107.3 million mobile subscribers in 2007, and this figure is expected to increase to 121.0 million by 2011. The penetration rate is forecast to grow to 95.4% by 2011 from 84.1% in 2007.