Japanese Mobile Market Forecast (2003-2009), Volume 1, 2006

Note: The figures in this report are based on Japanese fiscal year, from April to March of the next year.

Mobile Market Forecast (2005~2009)

Due to the merger between au and TU-KA in November 2005, only three mobile operators are delivering their services in Japan's mobile market. Besides, ASTEL and NTT DoCoMo, among the three PHS operators (NTT DoCoMo, Willcom, ASTEL), stopped accepting new subscribers on April 20 and at the end of April 2005 respectively. In the future, Willcom will be the sole supplier of PHS service. YOZAN, which acquired PHS nfrastructure from ASTEL Tokyo, is poised to concentrate on WiMAX business. YOZAN launched WiMAX service utilizing PHS base stations in December 2005.

Japan's mobile market is in a mature phase. New subscriber addition, which posted over 1,000 of increases every year until 199999, has been flat since 2000. However, 2004 was a year of change for mobile telecommunication market in Japan. The 3G technology, which accounted for 20.38% of the market in 2003,was widely adopted in mobile telecommunications. Thanks to the launch of numerous 3G mobile services, various mobile data communications become available, and ARPU of incumbent users is undergoing huge changes. Now, mobile phones are able to offer diversified services according to the lifestyles of users, ranging from voice communication and e-mail to mobile contents

ROA Group predicts that the number of mobile users will reach 91.811 million by the end of FY2005 (by March 2006). It has been assumed that Japanese mobile market is too saturated to add new subscribers. However, the Ministry of Internal Affairs and Communications announced it would review allocation of bandwidth while allowing new entrants to advance into the mobile market. Thereby three new entrants revealed their plans to join the market. IP Mobile will start its service in October 2006, followed by eMobile in March 2007 and BB Mobile in April 2007. This is the first time that Japan's mobile market has new entrants in 12 years since 1994. The changes will reduce general service charges and bring about various brand new services. Besides, Willcom's PHS business made a notable performance in 2005. The number of PHS users was falling after it reached its peak in April 2002. Its accumulated subscribers dropped to less than 5 million in 2004. Willcom, however has attracted new users and recorded an increase of 88,200 new users and 3.651 million in accumulated users as of December 2005. The progress that Willcom made in PHS is now having influence on the general mobile market. Recently, Willcom introduced a series of trendy handsets to change low-quality image compared to mobile phones, on top of its competitive edge in prices.

And Mobile Number Portability (MNP) will make its debut in the Japanese mobile market in November 2006. NTT DoCoMo is still the premier front-runner with lion's market share of more than 50%. But au, the second largest operator, is expanding its share backed by its popular 3G and contents services. The introduction of MNP will further intensify competition among carriers, resulting in the changes in the market positions of each operator.

In addition, NTT DoCoMo and Vodafone will start HSDPA (High Speed Downlink Packet Access) and au will initiate EV-DO Rev.A during 2006. Also two out of the three new entrants, which are scheduled to advance in the mobile market in 2007, declared they would provide HSDPA service from the early stage of their services. At that time, high speed network will make possible the supply of rich contents, jumpstarting competition among operators.

As a result, the number of mobile subscribers is expected to reach 105.942 million by the end of 2009 and growth of CAGR from 2004 to 2009 will post 3.96%.

Scope of Research

The report focuses on the analyses of mobile carriers' movements and peculiar policies by looking at events and topics which took place in each category of Japan's mobile market during the last half of 2005 (from July to December). Also it analyzes development and performance of Japan's mobile market since 2003, and predicts its future evolvement to 2009.

Research Method

The report projects how Japan's mobile market will change from 2005 to 2009 by utilizing forecasting methods, which ROA Group made for each country. Also, the projection is based on basic research (Primary & Secondary) towards mobile carriers (including new entrants), company reports and know-how of ROA Group.