WW-158 -- Dramatic Start of Mobile Number Portability

J@pan Inc presents the Wireless Watch Newsletter:

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

Commentary on the Business of Wireless in Japan
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Issue No. 158
Monday December 11, 2006
Tokyo

SUBSCRIBERS: 23,930 as of December 11, 2006

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CONTENTS
+ Viewpoint: Dramatic Start of Mobile Number Portability

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+ Viewpoint: Dramatic Start of Mobile Number Portability

Misleading advertisements, a complaining CEO on television,
a crashing customer registration system - it all happened
within 72 hours after the mobile number portability scheme
was introduced on October 24. What has been the impact so
far on the mobile subscriber base of the three large carriers?

The Telecommunications Carriers Association (TCA) released the
latest mobile market subscriber statistics on December 7.
DoCoMo suffered a net loss of 17,500 subscribers in November,
while KDDI registered a net gain of 324,900. Newly branded
Softbank Mobile added 68,700 subscribers to its customer
base. The net growth of the mobile market was 376,000
subscribers - the largest market growth for the month
November since 2001.

KDDI has been the biggest winner so far. Its impressive line
up of mobile phones and services has been attracting new
customers. The subscriber loss for DoCoMo is no surprise
- the carrier with the largest market share, has most to
loose from the introduction of mobile number portability.
Market researcher InfoPLANT confirmed the statistical
trends. 55% of those who want to switch carriers, prefers
KDDI, 17% Softbank and 15% DoCoMo.

Former Vodafone branded, Softbank Mobile has had a bad start.
It started with the 'Zero Yen' campaign that offered free
calls for its subscribers. Newspaper page-wide advertisements
and TV commercials promoted the 'Zero Yen' offering. The
devil was in the details, though. The conditions for using
this special campaign were written in very small characters
at the bottom of the advertisements. DoCoMo's CEO Nakamura
appeared on television complaining about the misleading
campaign. Forced by outside pressure, Softbank had to
withdraw the scam campaign.

Softbank was also involved in another headline making story.
Soon after the start of the mobile number portability scheme
started, its computer system that handles customer registrations
crashed - nobody could register to or cancel the Softbank
contracts. Softbank CEO, Masayoshi Son appeared on television
for a public apology. A second blow to his reputation. As a
result, Softbank's corporate image has suffered. Since
October 24, the percentage of people who trust Softbank
has dropped from 16 to 9% according to InfoPLANT. Mobile
content providers will not be happy with Softbank either.
When the mobile browser is started, users will now see the
Yahoo portal offering Yahoo's services instead of the
Vodafone Live portal where content providers sell their
content. The Yahoo portal, which is so heavy it takes
sometimes 10 seconds to load, still features a small
Vodafone Live! icon but it has definitely become difficult
for potential content subscribers to find the services
offered by third party content providers.

Softbank is working hard to improve its offering and
reputation. Rumors are getting stronger that Softbank
will launch an Apple iPhone in 2007.
Stay tuned!
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STAFF
Written by Arjen van Blokland; edited by the
J@pan Inc staff (editors@japaninc.com)
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