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Competition of 3G Services in Japan

Competition of 3G Services in Japan. Tatsushiro Shukunami Institute for Media and Communications Research Keio University, Japan. Outline of presentation. Overview of Mobile Market in Japan 3G Market in Japan What do customers want? Who will win?. Overview of Mobile Market.

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Competition of 3G Services in Japan

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  1. Competition of 3G Services in Japan Tatsushiro Shukunami Institute for Media and Communications Research Keio University, Japan

  2. Outline of presentation • Overview of Mobile Market in Japan • 3G Market in Japan • What do customers want? • Who will win?

  3. Overview of Mobile Market

  4. Mobile/Internet Penetration in Japan (Million) • Mobile Subscriber • > 80 million • Mobile Internet Penetration • > 70 million • High growth but almost saturated Source: TCA

  5. Market Share by Subscriber (Thousand) • #1:DoCoMo • #2:KDDI • au • Tu-Ka • #3:Vodafone • DoCoMo’s dominance is gradually eroding Source: TCA

  6. Growth Rate of Subscribers • Average growth rate came down from 50% to 8% • Highest Growth: DoCoMoTu-Ka Vodafoneau Source: TCA

  7. Annual Subscriber Increment (Thousand) • DoCoMo • Advantages on coverage and relianility in the early stages • i-mode added new market power since 1999 • Vodafone • Advantage by photo mail in 2001 and 2002 • au • 3G and Aplications such as Ringsong, and Walk Navigations lifted au in 2003 and 2004 Source: TCA

  8. 3G competition

  9. What is 3G? Source: ITU

  10. Technical Specifications of 3G • au’s EV-DO has the highest maximum speed. Source: DoCoMo, KDDI, Vodafone

  11. 3G subscribers • au has been dominant in 3G market. • DoCoMo has been trying to catch up. • Vodafone is far behind. Source: TCA

  12. Penetration of 3G • Penetration of 3G is more than 20% in average • More than 80% in au • About 10% in DoCoMo • About 1% in Vodafone Source: TCA

  13. Voice/Data use of KDDI subscribers • Data usage increased 2.5 times during the past 3 years, while Voice usage decreased 13%. Source: KDDI

  14. Comparison of 3G Strategies

  15. What do customers want?

  16. Network Video Phone Video Mail Video Clip Walk Navigation/ GPS Ringsong Network Video Game Standalone Photo Camera Video Camera Radio Receiver Analogue TV Receiver File Viewer IC Card Digital TV Receiver(2005) 3G service menu

  17. Penetration of high end functions (million) Source: ITmedia

  18. Mobile Content Market • Market size reached nealy $300 milion. • Music and video are about 50%. Source: DCAJ

  19. Most Popular Aplications • Camera and photo mail has become as popular as web access. • Regular e-mail is as popular as phone call. Source: MRI

  20. Who will win?

  21. Lessons in the past few years • Customers want convenience and value. High speed is not the first priority. • Service coverage problem still bars DoCoMo’s migration strategy. • Creative, easy-to-understand, and self-complete services are accepted first. • Full music download has great potential, as Ringsong and iPod has proved.

  22. DoCoMo • Technology • Reliability • Handsets • au • Creative Service • Low Price • Good sense • Vodafone • International

  23. Customers expectation • Flat rate pricing may change business model and handset requirements. • More download of music and game needs more storage in handsets. Source: MRI

  24. Issues on 3G Business • Identification of killer applications for 3G • Sustainability of WiFi and new entries • New business model for content provider • Rich content suitable for flat-rate • Flat-rate for “full” internet access • Handsets, PDA, and PC • Handsets Improvement • Weight, size, battery, and price • Standalone functions such as Digital TV reception • Service Coverage • Domestic and Global

  25. Thank you for your attention. shuku@mediacom.keio.ac.jp

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