WW-146 -- Broadband Keitai -- User Demographics, Rate Plans and Popular Contents

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J@pan Inc presents the Wireless Watch Newsletter:

W I R E L E S S W A T C H

Commentary on Japan's Wireless World
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Wireless Watch Newsletter
Issue No. 146
Wednesday August 31, 2005
TOKYO

++ Viewpoint: Broadband Keitai -- User Demographics, Rate Plans and Popular Contents
1. KDDI's WIN Is a Winner
2. 3G Offers Enriched Content

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++ Viewpoint: Broadband Keitai -- User Demographics, Rate Plans and Popular Contents
1. KDDI's WIN Is a Winner

KDDI, Japan's second largest carrier with 20 million subscribers, has been
pioneering third generation (3G) cdma technology. At the Mobile Contents
Forum seminar in Tokyo last week, Takeshi Takenouchi, KDDI's content
manager, gave us interesting insights in their progress in promoting
usage of 3G.

WIN, KDDI's 'broadband keitai' service, had attracted 4.3 million
subscribers as of June 30. The company's target is 7.6 million WIN
contracts by the end of March 2006. ARPU for its WIN service is
9,970 yen, 2,920 yen above the average ARPU for all its services.
Data contributes to 35% of the WIN ARPU. The user adoption of
the fixed-rate plans for the CDMA 1X WIN services has been
overwhelming -- an 85% penetration. Who said fixed rate plans
don't work?

KDDI subscriber growth has been keeping pace with DoCoMo's -- half of
the WIN subscriber growth comes from new KDDI customers rather than
from upgrades. Almost half of the CDMA 1X WIN subscribers are younger
than 30, 19% being in their teens and 24% being in their twenties,
according to Takenouchi.
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2. 3G Offers Enriched Content

Content consumption patterns have changed since the introduction of the
'all-you-can-eat' rating plans, because users don't have to bother anymore
about packet fees. Compared with 2.5G, 3G offers enriched content,
with chaku-uta (real music downloads) and chaku-movie
(video downloads) being the most popular.

In June, the cumulative number of chaku-uta full-length song downloads
passed 10 million within 8 months of the start of the service. Not
surprisingly, the chaku-melo (ring tone) business is gradually declining,
and will soon be overtaken by games.

New types of contents and communication services, such as electronic
books and blogging, are gaining popularity. The growth of EZ-book
(KDDI's e-book service) is two to three times faster than the traditional
e-book business for PC's and PDA's, which is worth 9 million dollars
a year. There are 7,000 titles available on 21 sites. EZ-books are most
popular among women in their twenties -- a rare case, because men
dominate the contents download market. Blogging is also on the rise.
As of June, 20 thousand bloggers registered with KDDI's WIN viewed
1.5 million pages per day.

3G services and contents are important for KDDI in that they differentiate
it from competitors DoCoMo and Vodafone. KDDI and DoCoMo each
added 230 thousand new contracts in July, Vodafone just 18,000. Next
year we will see a wide introduction of mobile wallet services -- an area
where DoCoMo has taken the lead. Will DoCoMo have the competitive
edge this time? Stay tuned.

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SUBSCRIBERS: 22,621 as of August 31, 2005

STAFF
Written by Arjen van Blokland; Edited by Burritt Sabin
(editors@japaninc.com)

(C) Copyright 2005 Japan Inc Communications KK. All Rights Reserved.

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