OK Ramsey, how about some boring news like this....
NTT DoCoMo Losing Mobile-Phone Market Share to
cdmaOne
July 1, 1999 (TOKYO) -- The nine companies of the NTT Mobile Communications
Network Inc. (NTT DoCoMo) group once dominated Japan's mobile phone market,
but they have been seeing declines in new subscribers since April 1999.
In the mobile phone market, the DoCoMo group accounted for 41.9 percent of the
net increase in unit subscriptions, which can be obtained by subtracting cancelled
subscribers from new subscribers. Its market share decreased below 50 percent for
the first time in three years. And the stagnant sales remained unchanged in June.
"The group has lost the momentum that it had at the beginning of this year, when it
held a market share of more than 70 percent," said a manager at a mass merchandiser
of electrical products in Tokyo.
The "J-PHONE" service, which is marketed by the Digital Phone Group of IDO
Corp., and services of the Cellular Phone Group are growing popular and eating into
NTT DoCoMo's share.
The Digital Phone Group has been enjoying a high degree of popularity among
young people, specifically for a service that transmits a short message for five yen.
(121.07 yen = US$1) It has been increasing its share steadily since last autumn.
IDO is witnessing a striking performance. Its net increase in unit-based subscriptions
was 1.8 percent in March but it climbed to as high as a 7 percent net increase in May.
IDO launched cdmaOne, a new mobile phone service, in April. It was launched
nationwide in collaboration with the Cellular Phone Group, and the service is scoring
a success.
The cdmaOne format deploys technology developed by Qualcomm Inc. of the
United States. Unlike the personal digital cellular (PDC) technology, it enables
superior high-speed data transfer, interruption-free service, and high-quality voice
communications. Before launching cdmaOne, IDO staged a TV marketing campaign,
stressing its high performance of continuous service and voice quality through TV
advertising.
NTT DoCoMo enjoys brisk corporate demand. However, because of the rapid
increase in the number of subscribers, it is suffering from inadequate infrastructure,
including base stations. This has resulted in chronic difficulties in terms of
connectivity. Also, its voice quality reportedly is degraded because in 1996 it adopted
the "half-rate" technology that doubles the number of channels available from a unit
frequency.
Users need signal clarity during important business calls. Interruptions during
conversations may have grave impacts from a user's perspective. IDO suggested that
business people replace their mobile phones with its products, by emphasizing the
new features that make up for the shortcomings of NTT DoCoMo's products.
Apparently, IDO hit the mark. Although men and women had been evenly split
among IDO's subscribers, the cdmaOne subscribers are now mainly those in their 20s
and 30s, and males account for 70 percent. IDO succeeded in obtaining support from
targeted business people. The cancellation rate was more than 2.5 percent in March,
but decreased to less than 2.5 percent once cdmaOne was introduced. Customers
who had not been satisfied with IDO's conventional mobile phones have become the
subscribers of cdmaOne, an IDO director said.
NTT DoCoMo is not watching IDO's growing business without taking a new strategy.
It started to offer the i-Mode service, which enables diversified services including
exchanges of emails and bank transfers through mobile phone handsets. Also, it
introduced the Doccimo dual-use handset compliant with cellular/PHS services. This
is one of the services that it offers to compete with cdmaOne by placing an emphasis
on its overall ability besides such basic performance as sound quality and
connectivity. However, it will be difficult for NTT DoCoMo to catch up with
cdmaOne only by strengthening value-added services. That is because users still feel
unsatisfied with the basic performance.
NTT DoCoMo is taking another measure. An NTT DoCoMo executive said that the
company is examining the introduction of a new voice-processing system to upgrade
the sound quality in base stations after this summer. Because manufacturers are
expected to market handsets compliant with this system in the autumn, NTT DoCoMo
will face intense competition for better sound quality.
NTT DoCoMo has been making efforts to improve product quality, and is putting
major resources into examining the introduction of the new system, the company
executive said. The new system will compete with cdmaOne, and the competition
among Japan's mobile phone companies will intensify from this autumn.
(Nikkei Business) |
