Big 3 prepare for telecom wars
yomiuri.co.jp
Big 3 prepare for telecom wars
Sachio Tanaka Yomiuri Shimbun Staff Writer
With the acquisition of Vodafone Group PLC's Japanese unit by Softbank Corp., Japan's telecommunications market will be dominated by the "big three."
The buyout will enable Softbank, now the nation's third-largest telecom firm, to advance its plans to make inroads into the mobile phone field and start work on integrating fixed-line and mobile phone services.
Softbank's rivals--NTT DoCoMo Inc. and KDDI Corp.--are certain to mount counteroffensives, setting the stage for a three-way battle in the industry.
Vodafone K.K., the Japanese arm of the British company and the world's largest mobile phone operator, lagged behind rivals in high-speed data services as it was slow to introduce third-generation cell phones capable of receiving streaming video.
Softbank President Masayoshi Son said at a press conference Friday the group would go all out to improve content, and carry the fight to the competition by making full use of the resources of affiliate Yahoo Japan Corp.
Softbank and Yahoo Japan will start offering streaming-video services for personal computers from April. But the acquisition of Vodafone by Softbank likely will lead to Vodafone customers being provided similar services.
For their part, DoCoMo and KDDI are strengthening their streaming-video services by tying up with television broadcasters.
DoCoMo plans to introduce in summer new mobile phones capable of data transmission at a higher speed. The company has tried to spur the expansion of its services by such means as jointly creating content with Nippon Television Network Corp.
KDDI is considering launching similar services for mobile phone users with a leading U.S. communications software company.
The eventual victor of the three-way battle will likely be the company that can provide the best content.
===
Will Softbank slash billing rates?
At this point in the game, it is unknown whether the buyout of Vodafone will make it easier for Softbank to cut mobile phone charges. But in the past, Softbank won customers by lowering rates for asymmetric digital subscriber line services.
Son has repeatedly said, "Mobile phone charges are too expensive in Japan."
Under its initial plan to enter the mobile phone industry on its own, Softbank intended to have lower rates. But the acquisition of Vodafone, which has about 15 million subscribers, is likely to hamper its attempts to do so, industry observers said.
"If it ventures into the industry on its own, an adventurous strategy to attract customers would help," an executive at a major telecom firm said. "But if it lowers phone charges for existing customers, this will reduce profits and it might not even be able to recover the money it spent on the acquisition."
Son avoided touching upon this topic at the press conference, saying, "It's too early to comment on a new rate strategy."
However, Vodafone has had a hard time increasing subscribers compared with DoCoMo and KDDI.
As Son himself has admitted that Vodafone has struggled in sales, Softbank could make a move to lure customers by lowering prices of mobile phones or discounting basic charges for a period.
===
Realignment likely
Softbank subsidiary Japan Telecom Co. has lost subscribers due to its sluggish fixed-line phone operations.
However, by placing Japan Telecom and Vodafone under its group, Softbank will be able to take new measures to attract more individual customers by introducing a discount plan for fixed-line and mobile phone services.
For corporate subscribers, Softbank likely will promote services beneficial both for fixed-line and mobile phone users by taking advantage of Nippon Telecom's existing customer base.
KDDI, which has operated both fixed-line and mobile phone fields, is likely to be forced to review its business model with the emergence of a new rival.
The NTT group also is likely to strengthen coordination among its mobile phone unit, DoCoMo, and fixed-line phone operators, NTT East and NTT West.
(Mar. 19, 2006) |
