Japan's Telecom operators changing strategy in wake of MNP & Content based applications

From paying for an air ticket to buying a drink from a vending machine or watching TV on the subway, using a mobile phone is very much a part of everyday life for people in Japan.
Japan's dominant mobile phone operator is NTT DoCoMo and with 94 million handsets for a population of 127 million, Japan has the highest ratio of mobile phones to people in the world. DoCoMo has more than 55 percent of the market.
DoCoMo's I-mode (the one-touch mobile Internet service pioneered in Japan in 1999) was a great success. Getting people to use their phones as electronic wallets, as keys to the their front door, as health monitoring devices and as entertainment gadgets with a vast array of functions is the revenue-driven goal for DoCoMo and its key competitors in the mobile field, second-ranked KDDI and the upstart Softbank Mobile, the former Vodafone outlet now controlled by Internet billionaire Masayoshi Son.

The pressure is on for all three companies, following the introduction in late October of mobile number portability (MNP), allowing Japanese users for the first time to switch carriers without having to give up their existing phone number. Analysts suggest as many as 8 million users will switch and another 34 million are considering a change. But one argument put forward against a big switch is the need for customers to change their phone-based e-mail addresses, which are linked to the respective carriers.
In the marketing blitz associated with MNP in Japan, all three carriers have rushed out new handset models and new payment plans, with Softbank Mobile unveiling the most aggressive options that include waiving initial handset costs and undercutting its rivals' monthly fees.
Average revenue per user (ARPU) runs at about 6,900 yen (about $60) a month for DoComo, 6,800 yen for KDDI and about 5,600 yen for Softbank.
As the mobile commerce market is moving to the next stage of retailing, distribution and financial services the operators will require a new business model.
In the past, the focus was on increasing traffic and ARPU. But now, DoCoMo's goal -- and that of its competitors -- is to create alliances across a range of services.
One example is credit, via a mobile wallet embedded in the handset. That will require a partnership with a financial services company. Another is mobile television and music video clips, which may see the phone companies linking with broadcasters and other media providers.
Already, consumers are happy to use their phones in commercial transactions. It is common to see teenage girls on the subway, bidding for the latest cosmetics on Internet auction sites.
Another popular download service is for romance serial novels -- light fiction that can be read quickly on phone screens while commuting. And in the not-too-distant future, virtually every convenience store in Japan will offer a scanner that allows goods and services to be bought via direct debit from a phone.
Not all the new mobile services necessarily will involve competition among carriers. In disaster response mode and possibly in providing community service obligations such as remote health diagnostic services, it may be that DoCoMo, KDDI and Soffbank will work together.
Certainly, the Japanese experience is that consumers are prepared to use their phones for a variety of services, from ring tones to restaurant locations. But one key issue is the level of security surrounding their personal data. If a phone is lost or stolen, for example, how vulnerable is the information on the phone?
On the security front, it is envisaged that while handsets will offer an increasing array of functions and carry a lot of personal information, the most vital data will be protected by staying on the network's servers, rather than handsets.
Whether consumers will accept these assurances on data protection is one of the challenges ahead for carriers in the world's most upwardly mobile society.

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