eAccess, eMobile, Y!Mobile
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eMobile started on March 31, 2007 as Japan's newest mobile operator, and offers 3G and LTE wireless broadband services. eMobile was founded as a subsidiary of eAccess, in 2012/2013 eAccess was ...

eMobile started on March 31, 2007 as Japan's newest mobile operator, and offers 3G and LTE wireless broadband services. eMobile was founded as a subsidiary of eAccess, in 2012/2013 eAccess was acquired by the SoftBank group. This report explains this very successful Japanese venture company from conception via growth and acquisition by the SoftBank Group. A success story among Japanese venture start-ups!

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eAccess, eMobile, Y!Mobile Presentation Transcript

  • 1. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 20141 EACCESS - EMOBILE -Y!MOBILE Version 12 of May 26, 2014 by Gerhard Fasol PhD, Eurotechnology Japan KK http://www.eurotechnology.com/ fasol@eurotechnology.com this is a free try-out version with a few selected pages. download the full latest version: http://www.eurotechnology.com/store/emobile/
  • 2. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EXECUTIVE SUMMARY - EACCESS, EMOBILE ANDY!MOBILE • eAccess was founded in November 1999 by Dr Sachio Semmoto, a veteran in Japan’s telecommunications sector, to offer fixed line ADSL broad band internet access services. • On May 1, 2005, Dr Sachio Semmoto and Eric Gan founded the mobile company eMobile as a subsidiary of eAccess, and with financial partners including Goldman-Sachs and others. eMobile was the only new entrant to Japan’s mobile sector which is building a nationwide wCDMA-HSDPA network from the beginning • eMobile accepted subscriptions and started mobile services in theTokyo, Osaka and Nagoya regions from March 31, 2007 • eAccess acquired ADSL provider ACCA networks, greatly expanding market share for ADSL (however, subscriber numbers for ADSL are shrinking in Japan because of the shift to FTTH • On March 31, 2011, eAccess absorbed its subsidiary eMobile. • In autumn 2012, while SoftBank was engaged in negotiations to acquire SPRINT in the USA, Masayoshi Son found that KDDI was in negotiations with eAccess to acquire eAccess. SoftBank intervened, and was quicker to close the deal with eAccess, and on Jan 1, 2013, SoftBank acquired 100% of eAccess. • On January 17, 2013, SoftBank sold part of the shares to 11 financial companies and telecom equipment suppliers.This was done by issuing voting and non-voting shares, resulting in a complex structure which is explained in this report. • There have been plans forYahoo-Japan (Yahoo KK) to acquire eAccess from SoftBank, however these discussions seem to have been abandoned, but there are discussions now of creating aY!Mobile virtual operator based on eAccess mobile network. • It has been announced that eAccess will be merged with Willcom in the near future. 2
  • 3. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EACCESS-EMOBILE -VERSION OVERVIEW 3 Version Date Revision and comments 1 March 19, 2007 2 August 31, 2008 3 September 29, 2008 4 November 1, 2008 5 November 11, 2008 6 January 16, 2009 7 June 1, 2009 8 July 21, 2009 9 December 12, 2010 10 December 13, 2010 Subscribe to this report, and we will regularly send you the latest versions. ! subscription, monthly payment, you can end the subscription any time (no refunds): ! subscription, annual payment, you can end the subscription any time (no refunds):
  • 4. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EACCESS-EMOBILE -VERSION OVERVIEW 4 Version Date Revision and comments 11 January 6, 2011 12 May 26, 2014 revision and update, reformat 13 14 15 16 17 18 19 20 Subscribe to this report, and we will regularly send you the latest versions. ! subscription, monthly payment, you can end the subscription any time (no refunds): ! subscription, annual payment, you can end the subscription any time (no refunds):
  • 5. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 LICENSE 5 Thank you for purchasing licenses to our reports, and for your cooperation with our licensing conditions. Only through your purchases can we continue to produce high-quality market reports from Japan ! INTHE CASE OF SINGLE LICENSE: If you have purchased a single copy license of this report, you are not permitted to copy this report except for a single back-up copy ! INTHE CASE OF CORPORATE LICENSE: in the case that your company has purchased a corporate license, you may distribute this report inside your company including protected corporate information servers locked to the outside, but you cannot distribute this report outside your company ! ANNUAL SUBSCRIPTION: we offer annual subscriptions for a particular report, and also for all our reports in one single transaction at a great discount - please contact us for details. Corporations subscribing will receive all updates at the time of publication, so that you can be sure to have the latest up-to-date information ! This research report comes without any warranty of any kind.The authors and Eurotechnology Japan K. K. do not warrant that the information in this report is without error, nor that the information serves any particular purpose. For legal advice please consult properly licensed legal professionals, for investment advice please consult properly licensed financial advisors.Trademarks mentioned are the property of their owners.
 Eurotechnology is a trademark or registered trademark in Japan and other countries.
  • 6. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EACCESS SLOGAN ! A NEW AND MORE EFFICIENT BROADBAND LIFE FOR ALL 6
  • 7. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 AGENDA (LIST OF CONTENTS) • Executive Summary • eAccess today • Financials, revenues, income, margins,ARPU • Japan’s telecom landscape: eMobile and eAccess’ battleground • eAccess and eMobile: Company structure and overview • Dr. Sachio Semmoto • Company structure • Shareholder overview • eMobile • Service roll-out • Shareholder structure • Market share and subscriber and growth • Strategy and positioning • 3G and LTE mobile network and base stations (suppliers) • Terminals and handsets • MobileTV • eAccess:ADSL and ISP • eAccess market position • Japan’s broadband markets • AOL Japan • Summary 7
  • 8. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EACCESSTODAY 8
  • 9. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EACCESSTODAY • eAccess provides wireless broad band services and fixed line ADSL broadband services • eAccess is integrated into the SoftBank group, management, base stations, backbone network are shared. • via a complex shareholding structure, eAccess has a certain degree of management independence from SoftBank, but financially is 99.25% owned by the SoftBank group. 9
  • 10. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 201411 eMobile March 31, 2011 absorbed by eAccess Founded May 1, 2005 founded by Dr. Sachio Semmoto March 31, 2007 start of mobile services Founder Dr Sachio Semmoto and Eric Gan Headquarters Tokyo Stock Exchange - Consolidated sales - Number of employees - Major share holders 100% eAccess Major business areas wireless broadband services
  • 11. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 FINANCIALS 14
  • 12. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 MOBILE ARPU 17 2010 2011 2012 2013 2014 2015 0 1000 2000 3000 4000 5000 APRUYEN US$ 10 US$ 20 US$ 30 US$ 40 eMobile ARPU c2014EurotechnologyJapanKK www.eurotechnology.com As for most mobile operators globally, eMobile’s ARPU is steadily falling, and currently belowYEN 3000/month (US$ 30 / month) eMobile is planning to turn around this decreasing ARPU by improving services
  • 13. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 JAPAN’STELECOM LANDSCAPE-
 EMOBILE AND EACCESS’ BATTLEGROUND 18 For a detailed overview of Japan’s telecom markets, see http://www.eurotechnology.com/store/jcomm/
  • 14. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EACCESS & EMOBILE 23
  • 15. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EACCESS AND EMOBILE • eAccess and eMobile are lead by Dr Sachio Semmoto. eAccess was founded on November 1, 1999. • eAccess is one of Japan’s leading ADSL service providers with about 2 million subscribers. • However, with Japan’s trend to switch to FTTH the number of ADSL subscribers is decreasing. • Consequently the number of eAccess subscribers is decreasing and we believe the prospects for eAccess are mainly for areas where NTT does not roll out FTTH, e.g. for rural areas • With the number of ADSL subscribers falling, eAccess is following a dual strategy: • increase the ARPU from existing subscribers, e.g. by offereningVOIP via metal connections (service is provided by KDDI) • Attracting ISP customers through AOL. For this purpose eAccess acquired AOL-Japan in July 2004 • eMobile was founded on January 5, 2005 • Worked towards and obtained a 3G mobile license in 2005 • 1.7 GHz mobile license awarded by Japan’s General Affairs Ministry on November 9, 2005 • Builds a nationwide 3G (wCDMA-HSDPA) network, started with networks inTokyo, Osaka, and Nagoya municipal regions and today covers most major regions of Japan • Initially data services only were offered, voice services started in 2008, initially only in the municipal areas with nationwide coverage via a roaming agreement with DoCoMo. • Data services started on March 31, 2007, subscriber acquisitions exceeded expectations • WiMax license not granted • eAccess has obtained a license for testing WiMax services from Japan’s General Affairs Ministry. eAccess is currently testing WiMax services from three base stations in theTokyo area. • However, the WiMax license was not granted. 2 licenses awarded to • KDDI led consortium (offering services under the brand UQ Communications) • Willcom.After bankruptcy of Willcom, this license was transfered to a new operator:Wireless City Planning. 24
  • 16. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 DR. SACHIO SEMMOTO • While SoftBank is driven by Masayoshi Son, eAccess and eMobile are driven by serial mega-entrepreneur Sachio Semmoto. • In contrast to SoftBank’s Masayoshi Son who was financially independent since his student days by selling a patented invention, Sachio Semmoto initially worked several years at Japan’s telecommunications giant NTT, before becoming an entrepreneur as co-founder of the new telecommunications company DDI, which today is part of KDDI. Semmoto had a leading role in building DDI in record time, leading to an IPO. DDI was later acquired by KDD - the resulting merged company changed the name to KDDI, reflecting the merger of KDD with DDI (for an overview of KDDI, including the M&A history, see: http://www.eurotechnology.com/store/kddi/ ). • Short personal history • NTT: developed fibre optic systems • 1974-1980: Japan’s representative to the ITU on optical fiber and ISDN • Kyocera Corporation • Co-Founder of DDI Corporation (today part of KDDI), • IPO onTokyo Stock Exchange • Merged with KDD, the resulting company named KDDI • Professor at Graduate School of Business Administration of Keio University • November 1999: founded eAccess • October 2003: IPO on Mothers • November 2004:Tokyo Stock Exchange, First Section 25
  • 17. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EACCESS/EMOBILE - COMPANY STRUCTURE BEFORE ABSORPTION OF EMOBILE BY EACCESS 26 47% 53% Investors founded: January 5, 2005 Capital shares and reserves: YEN 143.2 billion wCDMA-HSPDA start: March 31, 2007 Target: 5 million subscribers by March 2012 founded: November 1, 1999 Capital shares and reserves: YEN 22.6 billion Employees: 600, Tokyo Stock Exchange (1st Sect) ADSL wholesale 1.92 million subscribers AOL-Japan ISP, acquired: July 2004 239,000 subscr. WiMax test license testing (c)2007EurotechnologyJapanKK www.eurotechnology.com • This figure shows the structure of the eAccess/eMobile group at the time when eMobile was founded in 2005. • Since this time, eAccess and eMobile have been merged into eAccess, and has been acquired by the SoftBank group.
  • 18. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EMOBILE SHARE OWNERSHIP IN EACCESS LTD (CAPITAL=YEN 17.1 BILLION) BEFORE ABSORPTION BY EACCESS 27 Shareholder Number of Shares Percentage Morgan Stanley 259,260 17.74% Sachio Semmoto 101,810 6.96% The MasterTrust Bank of Japan (Trust Acct.) 98,132 6.71% Eric Gan 94,765 6.48% Goldmann Sachs 67,760 4.63% Nomura Int (Hong Kong) 48,030 3.28% Societe General (Paris) 43,364 2.96% eAccess Holdings LLC 22,220 1.52% Bank of NewYork 20,696 1.41% BBH (LUX) Fidelity Active Strategy – Japan Fund 19,887 1.36% Other (27,719 share holders) 685,386 49.90% Total shares issued 1,461,310 (810,607 foreign) 100% (55.5% foreign holders)
  • 19. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 201428
  • 20. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 MARKET SHARE AND SUBSCRIBER GROWTH 34
  • 21. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EMOBILE NET ANNUAL GROWTH • Initially, in the start-up phase, eMobile achieved high annual growth on the order of 1 million new subscribers per year, however this rapid growth soon slowed, and in the first quarter of 2014, eMobile even lost subscribers to competitors. 39 1996 1998 20002000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 0 2000000 4000000 6000000 8000000 10000000 netgrowthyear Net annual growth of subscriptions DoCoMo KDDI SoftBank eMobile Willcom Astel Vodafone UQ J Phone WCP iPhone SoftBank July 11, 2008 iPhone 4S KDDI SoftBank Oct 14, 2011 i Mode Feb 22, 1999 iPhone 5 Softbank KDDI Sept 21, 2012 Softbank acquires Vodafone KK c2014EurotechnologyJapanKK www.eurotechnology.com
  • 22. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 PREPAY 41
  • 23. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EM-CHARGE (PREPAY) • eMobile achieved approx. 90,000 prepaid users by mid-2011, however stopped disclosing prepaid usage numbers by mid-2011, therefore the graph above ends in mid-2011. • in any case, the share of prepaid usage among eMobile users is very small. 43 2007 2008 2009 2010 2011 2012 2013 2014 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 110000 120000 subscriptions Prepaid mobile phones eMobile eMobile c2014EurotechnologyJapanKK www.eurotechnology.com
  • 24. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 STRATEGY AND POSITIONING 44
  • 25. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 MVNO BUSINESS 48
  • 26. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 MVNO BUSINESS • The Japanese government has been actively promoting the development of MVNO business development to increase the number of wireless operators offering services to consumers and businesses. • Astonishing government and industry, SoftBank and eMobile announced an MVNO agreement, where SoftBank will use eMobile’s wireless data network to offer flat-fee data-only services targeting wireless data connectivity for laptops and other portable devices. • Previously, SoftBank was the only operator in Japan which could not offer flat-rate data connection for laptops, due to limited network capacity. 49
  • 27. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 SPECTRUM LICENSE AND BASE STATIONS 50
  • 28. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 HOW MANY LOW POWER REPEATERS DOES EMOBILE HAVE? • eMobile has about 45,000 low power repeaters installed 57
  • 29. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 LTE 58
  • 30. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 TERMINALS AND HANDSETS 61
  • 31. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 EACCESS • eAccess offers ADSL broadband access and ISP services to approx. 2 million subscribers • The number of subscribers is falling, as subscribers switch to FTTH, which has much higher connection speed • eAccess is seeking to add services to increase ARPU and to gain additional subscribers for the fixed line services: • eAccess acquired the Japan subsidiary of AOL from DoCoMo in order to offer ISP services • eAccess entered into a cooperation with KDDI to offerVOIP telephony over copper lines to subscribers. eAccess acts as a reseller of KDDI services • Recently eAccess acquired ACCA Networks and greatly expanded the combined market share (ACCA networks had applied for a WiMax license in cooperation with NTT-DoCoMo, however was not awarded a license, which greatly weakened ACCA’s position. In addition,ADSL markets are shrinking in Japan with the growth of FTTH) 70
  • 32. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 DSL BROADBAND MARKET SHARES • eAccess has achieved approx. 23.6% market share in Japan’s shrinking DSL market 74 Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 Mar 2011 Mar 2012 0 10 20 30 40 50 60 70 80 90 100 DSLmarketshares DSL market shares in Japan SoftBank 38.8 eAccess 23.6 NTT East 16.9 NTT West 17.7 Other 3c2012EurotechnologyJapanKK www.eurotechnology.com
  • 33. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 AOL 75
  • 34. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 SUMMARY 77
  • 35. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 SUMMARY • eAccess today is part of the SoftBank Group, and is jointly owned by SoftBank and 11 financial companies and equipment suppliers. Management, base stations, spectrum, network, distribution networks are jointly management within the SoftBank group. • eAccess is one of Japan’s leading fixed line broadband (ASDL) service providers, and with the acquisition of ACCA Networks, could recently expand market share – in the shrinking ADSL market • eMobile started operations on March 31, 2007, as the fifth mobile service provider in Japan. • Initially eMobile offered HSDPA data services only, expanding from theTokyo, Osaka and Nagoya areas, and recently started also voice services, with national coverage with roaming over DoCoMo’s network. • eMobile’s HSDPA radio network today covers about 85% of Japan’s population • eMobile announced that because of careful purchasing decisions, eMobile’s network investment cost and basestation acquisition cost is 5 to 8 times lower than DoCoMo’s • With a very competitive data value proposition, eMobile could attract more subscribers than expected. It has been announced that eAccess will be merged with Willcom in the near future. 78
  • 36. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 MORE INFORMATION: • Blogs: • http://fasol.com/blog/ • http://eurotechnology.com/blog/ • Reports: • http://www.eurotechnology.com/store/ 79
  • 37. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com eAccess - eMobile -Y!Mobile (12th version) May 26, 2014 CONTACT • Eurotechnology Japan KK • http://www.eurotechnology.com/ • CEO: Gerhard Fasol PHD • Fasol@eurotechnology.com • Mobile: +81-90-8594-6291 80