Japan's telecommunication markets
Upcoming SlideShare
Loading in...5
×
 

Japan's telecommunication markets

on

  • 9,753 views

Japan's telecommunications industry size is on the order of US$ 200 billion for the operators alone, and annualy about US$ 20 billion are invested in networks. Japan's has one of the world's most ...

Japan's telecommunications industry size is on the order of US$ 200 billion for the operators alone, and annualy about US$ 20 billion are invested in networks. Japan's has one of the world's most advanced cellular networks. With Softbank's acquisition of SPRINT-Nextel, Softbank has attracted global attention, and Softbank's charismatic founder and leader, Masayoshi Son has declared that "as a man, he of course wants to be Number One" expressing his hope to grow Softbank into the global telecommunications leader.
This report gives a thorough overview of Japan's telecommunications markets, with a wealth of statistical and financial data in visualized graphical form with analysis and trends.

Statistics

Views

Total Views
9,753
Views on SlideShare
4,359
Embed Views
5,394

Actions

Likes
3
Downloads
189
Comments
0

14 Embeds 5,394

http://www.eurotechnology.com 5346
http://www.kred.com 14
http://kred.com 10
http://translate.googleusercontent.com 9
https://twitter.com 4
http://www.google.com 2
http://www.google.co.uk 2
https://www.google.co.za 1
http://honyaku.yahoofs.jp 1
http://www.google.com.hk 1
http://www.google.rs 1
http://www.google.com.au 1
http://www.google.ru 1
http://www.google.co.in 1
More...

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Japan's telecommunication markets Japan's telecommunication markets Presentation Transcript

    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’STELECOM MARKETS Version 65 of May 7 2014 ! by Gerhard Fasol PhD, Eurotechnology Japan KK http://www.eurotechnology.com/ fasol@eurotechnology.com ! This is a free extract of the full report. Purchase the latest version of the full report here: http://www.eurotechnology.com/store/jcomm/ 1
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 EXECUTIVE SUMMARY: JAPAN’STELECOM MARKETS 2 • Japan is the most exciting and the most advanced, and very large telecommunications market globally. • Japan pioneered and brought to market a very large number of technologies, business models and ideas, long before anywhere else in the world, including mobile internet, mobile music, cameras in phones, mobile advertising, mobile commerce, 3G, and more. • In the past, NTT and NTT’s wireless subsidiary, now named Docomo, and KDD (which very successfully restructured via a series of acquisitions and is today named KDDI) had monopolies on Japan’s telecommunications. However, today SoftBank is the most rapidly growing Japanese telecommunications company, and has recently overtaken NTT-Docomo and KDDI in terms of revenues, operating income and net income, and many other KPIs. • While SoftBank continues to grow aggressively both internally by turning around and growing existing business, and by acquisitions, NTT-docomo recently withdrew from the Indian market, selling NTT-docomo’s investment in India, and further withdrawing into Japan • Japan’s fixed line internet services globally have the highest bandwidth (in many areas 1Gps) at lowest prices and the highest FTTH penetration. Japan has more FTTH subscribers than all of EU+Iceland+Switzerland+Norway. • This report explains Japan’s telecom market landscape and its key players quantitatively and qualitatively, displaying data from our statistical data base graphically in easy to understand figures, and with our analysis. • We show and analyze latest financial results, subscriber market shares and many other key market data and trends.
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’STELECOM MARKETS-VERSION OVERVIEW 3 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): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU58870246995 ! subscription, annual payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU84043119788 Version Date Comments 8 September 19, 2004 10 October 28, 2004 14 May 28, 2005 15 June 21, 2005 17 January 15, 2006 20 August 4, 2006 22 October 10, 2006 23 January 4, 2007 27 June 12, 2007 30 January 17, 2008 31 August 7, 2008 32 August 22, 2008
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 LICENSE 4 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.
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’STELECOM MARKETS-VERSION OVERVIEW 5 Version Date Comments 33 August 27, 2008 37 January 19, 2009 38 January 21, 2009 39 January 31, 2009 40 February 8, 2009 41 February 12, 2009 43 March 15, 2009 44 April 2, 2009 46 May 18, 2009 50 May 6, 2010 51 December 10, 2010 52 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): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU58870246995 ! subscription, annual payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU84043119788
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’STELECOM MARKETS-VERSION OVERVIEW 6 Version Date Comments 54 December 15, 2010 55 January 6, 2011 56 January 20, 2011 57 January 28, 2011 58 October 1, 2012 59 January 15, 2013 60 February 19, 2013 subscriber numbers updated 61 May 6, 2013 Financials for FY2012 added 62 May 12, 2013 63 July 19, 2013 63 March 16, 2014 subscriber data updated 64 May 1, 2014 Docomo results 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): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU58870246995 ! subscription, annual payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU84043119788
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’STELECOM MARKETS-VERSION OVERVIEW 7 Version Date Comments 65 May 6, 2014 financial data FY to March 2014 66 67 68 69 70 71 72 73 74 75 76 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): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU58870246995 ! subscription, annual payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU84043119788
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 AGENDA - LIST OF CONTENTS 8 - Japan’s telecom industry – overview, key trends for 2014 - e-Japan, u-Japan and national policy - globalization vs Japan’s “Galapagos Effect” - the “post Galapagos working group” and its recommendations - Evolution of Japan’s telecom landscape - landscape overview and major M&A transactions - The main players: NTT, KDDI and Softbank - Financial overview: annual revenues, operating income, net income and investments - Quarterly financial data: quarterly revenues, operating income and net income - NTT Group, NTT East, NTT West, NTT Communications, NTT Data and NTT docomo - KDDI - UQ Communications - Softbank - eAccess and eMobile - Willcom - Wireless City Planning - Wireless markets - Wireless spectrum allocation - Mobile phone base station deployment for each operator - Market shares and subscriber numbers and trends for each operator - Prepaid mobile market - From birth of internet to legacy: i-Mode, EZweb,Yahoo Keitai - 3G and 3.5G and LTE in Japan - From Galake to Smartphones: Mobile phone handset market, monthly sales statistics, and recycle time - The AU design project: IIDA - Sweets for teenage girls
 Raku Raku phones for the silver market,Tuka-S: pioneer for the silver market - Mobile music, LISMO! - Mobile payments and keitai credit - FeliCa wallet phones - MobileTV - Fixed line markets, FTTH - FTTH market - DSL market - Optical network - Transition to NGN - Business cases - Japan’s telegram market - Summary
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 KEYTRENDS FOR 2014 9 • Softbank is aggressively expanding market share in Japan, and global market share. Masayoshi Son said:“I am a man, and I want to be number one”. Clearly Masayoshi Son is aiming for Softbank to become one of the top, if not Number 1 globally in the telecommunications sector.With his customary midas touch, Masayoshi Son may well achieve, what NTT- docomo did not achieve with i-Mode: global success based on Japan’s mobile communications developments. Softbank is reported to aim for additional acquisitions, e.g.T-Mobile of USA, and European operators have also been mentioned. • Smartphones (ie phones using Apple’s iOS or Google’s Android operating systems) are set to dominate Japan’s mobile communications market, with currently about 70% of all domestic mobile phones shipped. If iPhones, Samsung, htc, LG and other non-Japanese mobile phones are included the smartphone shares of handset sales are even higher. Docomo, KDDI and Softbank offer iPhones. • With the rapid adoption of smartphones data traffic rises dramatically, leading to accelerated LTE roll-out, and off-load of data traffic to WiFi networks wherever possible. • With Softbank acquiring eAccess/eMobile and having become sponsor of Willcom’s rehabilitation, and KDDI acquiring 50% of cableTV company J:COM there is a clear trend to market consolidation with three players: NTT, KDDI and Softbank. Japan’s General Affairs Ministry hoped to encourage new entrants, however all new entrants have either failed, or were acquired, or operate with investment and under the wings of one of the three dominating companies. • eAccess/eMobile and Willcom will be combined and sold toYahoo KK, thus eAccess/eMobile and Willcom will remain within the wider Softbank group.
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 MAJOR RECENT M&ATRANSACTIONS (1) 10 Acquirer Acquired company Value Date Comments Softbank Vodafone-Japan US$ 15 billion March 17, 2006 accelerated Softbank’s entry into mobile communications Softbank SPRINT US$ 20 billion Oct 2012 Softbank acquired approx. 90% of SPRINT (subject to negotiations...) Softbank eAccess/eMobile US$ 2 billion Oct 2012 Softbank preempted acquisition attempt by KDDI KDDI and Sumitomo J:COM (Jupiter Telecom), JCN US$ 7 billion Oct 2012 KDDI, Sumitomo switch from competition to cooperation
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 MAJOR RECENT M&ATRANSACTIONS (2) 11 Acquirer Acquired company Value Date Comments Yahoo KK eAccess + Willcom YEN 324 billion (US$ 3.2 billion) summer 2014 Yahoo KK is part of SoftBank group. YEN 55.7 bill gain for SoftBank SoftBank GungHo Softbank increases shareholding from 33.6% to 58.5% March 25, 2013 Tender Offer SoftBank and GungHo SuperCell US$ 1.53 billion for 51% share holding October 15, 2013 SoftBank: $ 1.224 million (80%) GungHo: $ 306 million (20$) SoftBank BrightStar US$ 1.26 billion for 57% shareholding Oct 2013 CEO Marcelo Claure appointed to SoftBank Board
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 E-JAPAN AND U-JAPAN AND NATIONAL POLICY 12
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 “I-JAPAN 2015” • Three priority areas • Electronic Government and Electronic Local Government • National e-PO Box • Healthcare • Education and human resources • Revitalizing industry and local communities and nurturing new industries • Development of digital infrastructure 17
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 GLOBALIZATIONVS JAPAN’S “GALAPAGOS EFFECT” 24
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’S “GALAPAGOS EFFECT” • “Galapagos effect” is a term which has been used since about 2005 even by Japanese Government to describe a situation, where Japanese companies develop new technologies, and bring new services and business models to Japan’s market, but fail to capture global value. ! • The term “Galapagos effect” is often used to characterize Japan’s pioneering development of mobile internet and mobile internet phones starting with DoCoMo’s i-Mode in 1999, while Japanese mobile phone handset makers failed to capture global market share. ! • Another similar example is electronic money and mobile payments, which Japan introduced much earlier than other countries, but where Japanese companies failed to make global impact or capture global value. ! • Recently this term is used much more broadly in many areas, and is also used to characterize the current crisis of Japan’s electronics industry, especially SONY, SHARP and Panasonic. 25
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’S “GALAPAGOS EFFECT” • DoCoMo’s pioneering mobile data service i-Mode started on February 22, 1999, about 14 years ago, and was soon followed by KDDI/AU’s Ezweb and J-Phone’s Jsky mobile data services. Japan’s mobile phones at that time were far in advance of mobile phones anywhere else in the world, and a wide range of mobile data services emerged. ! • DoCoMo attempted to build a global business based on i-Mode, and Japan’s mobile phone makers and content businesses hoped to build on DoCoMo’s global expansion.This attempt collapsed and failed, and DoCoMo wrote off about US$ 10 billion (investments in AT&T Wireless, KPM-Wireless, Hutchison Whampoa) during 2002-2003 as a consequence, leading to net losses of US$ 10 billion. Japan’s mobile phones where the most advanced during this time, while Japan’s handset makers failed to capture global market share with these “galake” phones.Today Japanese makers global market share is 5% or less, and essentially restricted to Japan. ! • It took until about 2008 – about 6 years – for this situation to sink in, and today even Japan’s Government and many press articles and books are discussing the “Galapagos Effect”. ! • “Galapagos effect”: on Galapagos islands many fantastic exotic species exist, which cannot survive in other parts of the world. Similarly, when people talk about the “Galapagos effect”, they refer to beautiful technologies and business models such as i-Mode, where globalization has been attempted but which failed. 26
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 REASONS FOR JAPAN’S “GALAPAGOS EFFECT” • Reasons for Japan’s “Galapagos effect” include: • Domestic Japanese companies focused on Japan only:“created by Japan, for Japan and of Japan, and Japan is the crux of the issue” (JunkoYoshida, Journalist for EE-Times about Renesas and Renesas- Mobile in the article entitled “Free Renesas from its golden cage called Japan”) • (Temporarily) protected markets in Japan. e.g. Japanese mobile phone makers were almost exclusive suppliers to Japan’s mobile phone operators. Missed the paradigm shift from “Galapagos Keitai” (= Galakei) feature phones (using mainly Nokia’s Symbian OS) to smart phones (iPhone and Android phones). Missed opportunities to grow business outside Japan. • Lack of focus. Japanese electrical makers are spread very thinly over very many business areas at very low or zero margins, and do not achieve global impact on any. • Lack of diversity. Boards, management and employees are almost exclusively Japanese, therefore cannot understand markets outside Japan in depth, and therefore miss important market trends, such as smart phones. Lack of diversity reduces creativity and management quality. IMD President DominiqueTurpin said “You can argue that the strength of Japanese culture, in terms of homogeneity, is also a weakness” 27
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 THE “POST-GALAPAGOS WORKING GROUP” • The “Post-Galapagos Committee” has been convened and is chaired by one of the three creators of i-Mode,Takeshi Natsuno, and the author of this present report is the only non-Japanese member working on this committee. • Purpose of the “Post-Galapagos Committee” is to call attention among Japanese leadership on changes necessary in industry structure and thinking to enable more global business to be built based on Japan’s advanced technologies and content, and to encourage entrepreneurship. 28
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 “POST GALAPAGOS STUDY GROUP” 25 JAPANESE LEADERS + 1 FOREIGNER (GERHARD FASOL) WORKING FOR ONEYEAR ON CONCEPTSTO OVERCOME JAPAN’S “GALAPAGOS EFFECT” 29 see the article from ACCJ-Journal http://www.eurotechnology.com/2013/10/07/galapagos/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 RECOMMENDATIONSTOTHE CONTENT SECTOR • Globalize • Value real life, make real life more pleasant • Improve and strengthen market communication and branding • Soft power strategy • Create global soft-power from Japanese lifestyle • Keywords:“interesting high-tech”, fashionable high-tech” • Create platforms similar to Disney 34
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 EVOLUTION OF JAPAN’S TELECOM LANDSCAPE 35
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 EVOLUTION OF JAPAN’S TELECOMMUNICATIONS LANDSCAPE • The following diagrams show how Japan’s telecom landscape evolved from a dual monopoly in pre-liberalization, pre-internet times: • NTT monopoly for all national communications • KDD for all international communications (voice, leased line) • to today’s structure via liberalization, new entrants (especially DDI now merged into KDDI, and Softbank via a series of acquisitions fromTokyo Metallic toVodafone-Japan and Sprint), vigorous M&A, foreign investments, and recently consolidation. • While DoCoMo’s major internationalization drive failed, and recently show modest successes in India and Guam, Softbank recently ventured into the USA by acquiring SPRINT, and aims to become the global No. 1 in telecommunications.
 36
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’STELECOM LANDSCAPE PRE-LIBERALIZATION, PRE-INTERNET 37 Long Distance Local Mobile communications KDD Japan's Telecommunications Landscape pre-liberalization, pre-internet (c) 2013 www.eurotechnology.com International NTT PHS NTT KDD
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 THETHREE MAIN PLAYERS 41
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’STHREE MAJORTELECOM OPERATORS FY 2012 43 Tokyo Stock Exchange Code FY 2012 sales (ends March 31, 2013) FY2012 net profit (ends March 31, 2013) market cap (May 2, 2013) NTT 9432 ¥ 10810 billion US$ 106 billion ¥ 530 billion US$ 5.3 billion ¥ 6311 billion US$ 63.5 billion NTT docomo 9437 ¥ 4470 billion US$ 47.5 billion ¥ 496 billion US$ 5.0 billion ¥ 6918 billion US$ 70 billion KDDI 9433 ¥ 3662 billion US$ 36.8 billion ¥ 241 billion US$ 2.4 billion ¥ 4225 billion US$ 42.5 billion Softbank 9984 ¥ 3378.3 billion US$ 34 billion ¥ 289.4 billion US$ 3 billion ¥ 5703 billion US$ 57.3 billion
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 ANNUAL NET INCOME 47 • Clearly visible is the huge US$ 10 Billion hole in DoCoMo’s net profits around 2002, due to DoCoMo’s failed attempt to build a global business by investing in several companies around the globe including AT&T, KPN, and Hutchison/Three.Almost all of Docomo’s international investments had to be written off. NTT-Docomo also withdrew from theTATA investment in India. • SoftBank’s operating profits have overtaken both NTT-Docomo’s and KDDI’s in size. Softbank’s successful acquisition (2006) and turn-round ofVodafone-Japan is clearly visible.With the integration of Sprint, Gung-Ho, and SuperCell, SoftBank’s net income has risen dramatically during 2013/2014.
 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0 500 1000 1500netincomeYENbillion US$ 5 billion US$ 10 billion Annual net income of Japan's mobile operators DoCoMo SoftBank KDDI Vodafone c2014EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 QUARTERLY FINANCIAL RESULTS 54
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 NET INCOME 57 • SoftBank’s net income (after tax) is positive since the July-September 2005 quarter. SoftBank’s net income was held back by servicing the substantial debt from theVodafone-Japan acquisition.With the introduction of iPhone on July 11, 2008, and with the pay-down of the debt from theVodafone-Japan acquisition, Softbank’s net income is increasing steadily, and has overtaken both Docomo’s and KDDI’s net income on an annual basis. • Back in 2005-2007 NTT-docomo’s net income was continuously falling, and NTT-docomo risked to fall into losses if the trend continued. NTT-docomo succeeded to stabilize the net-income situation via cost-cuts (including equipment costs), as well as increasing profitability via additional services such as mobile ecommerce services. 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 100 0 100 200 300 netincomequarterYENBillion iPhone SoftBank July 11, 2008 iPhone 4S KDDI Oct 14, 2011 Quarterly net income loss of Japan's mobile operators DoCoMo KDDI SoftBank Vodafone Japan US$ 1 Billion US$ 2 Billion c2014EurotechnologyJapanKK www.eurotechnology.com iPhone 5 Softbank KDDI Sept 21, 2012 SoftBank acquires Vodafone KK March 17, 2006
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 NTT GROUP 60
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 NTT 62 Founded April 1, 1985 as a result of privatizing the nationally owned telephone operations One on of the world’s largest telecommunications companies Largest share holder:The Government of Japan Discussions about reform of the group structure are continuing ! Major NTT Group companies: • NTT Communications (100% owned by NTT) • NTT East (100% owned by NTT) • NTT West (100% owned by NTT) • NTT DoCoMo (65.3% owned by NTT) • NTT Data ( 54.2% owned by NTT) • Other NTT Group companies • NTT Business Associe • NTT Electronics • NTT AdvancedTechnology • NTT Facilities • NTT Leasing • NTT Urban Development • NTT Advertising • NTT Comware • NTT Software • NTTAFTY • NTT Resonant • and many more
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 NTT DOCOMO 68
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 201469 NTT docomo docomo = do communications over the mobile network Founded August 14, 1991 as NTT Mobile Communications Planning Co. April 1992 named NTT DoCoMo, July 1993 split from NTT Founder Headquarters Tokyo Stock Exchange TokyoTSE 9437 (IPO: October 22, 1998), NYSE: DCM (IPO: March 2002), LSE: NDCM (IPO: March 2002) Consolidated sales YEN 4240 Billion (US$ 47.5 Billion) (FY2011, ended March 31, 2012) Number of employees 23,289, consolidated (March 2012) Major share holders NTT (66.65%) (since Japan’s Ministry of Finance owns 32.6% of NTT, the Ministry of Finance owns 21.7% of NTT docomo via NTT) Major business areas mobile communications
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 DOCOMO 70 For details see our report on NTT-Docomo: http://www.eurotechnology.com/store/docomo/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 KDDI + OKINAWA CELLULAR 71 For details see our report on KDDI: http://www.eurotechnology.com/store/kddi/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 201472 KDDI Founded June 1, 1984 Founder Kazuo Inamori (founded DDI) Headquarters Tokyo Stock Exchange TokyoTSE 9433 Consolidated sales YEN 3572 Billion (US$ 40 Billion) (FY2011, ended March 31, 2012) Number of employees 19,670, consolidated (March 2012) Major share holders Kyocera (12.76%),Toyota (11.09%) Major business areas fixed and wireless telecommunications
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 KDDI DESIGN STUDIO 79 On March 4, 2005 KDDI opened the “KDDI Designing Studio” in Tokyo’s fashion district Harajuku. ! The purpose of the “KDDI Designing Studio” is: •Promote the KDDI brand •Collect customer feedback

    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 UQ COMMUNICATIONS (KDDI) 80
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 SOFTBANK 85 more about SoftBank: http://www.eurotechnology.com/store/softbank/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 201486 Softbank Founded September 3, 1981 Founder Masayoshi Son Headquarters Tokyo, Shiodome Stock Exchange TokyoTSE 9984 (IPO: July 22, 1994) Consolidated sales YEN 3202.4 Billion (US$ 35.9 Billion) (FY2011, ended March 31, 2012) Number of employees 21,858, consolidated (March 2012) Major share holders Masayoshi Son (21.4%) Major business areas fixed and mobile/wireless communications and data services
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 MASAYOSHI SON 87 • Similar to Bill Gates’ role as Founder and long-time leader of Microsoft, Masayoshi Son is the founder and leader of the SoftBank Group of companies. • Masayoshi Son was born on August 11, 1957 inTosu (Saga-Prefecture Japan) with Korean nationality and of Korean origin. Son became a naturalized Japanese citizen later in life. • According to FORBES Magazine, Masayoshi Son is worth about US$ 7 Billion, and it is largely Masayoshi Son’s reputation and track record, which was essential to obtain the US$ 15 billion finance for SoftBank to acquireVodafone KK in March 2006. Short personal history • August 11, 1957, Born inTosu (Saga Prefecture, Japan) with Korean nationality • Around 1972: Met with McDonald’s Japan Founder and CEO, Den Fujita, who recommended Son to learn English and to study in the USA • 1973, at age 16 moved to San Francisco, went to high-school in San Francisco • Enrolled at University of California in Berkeley in Economics • Invented and patented translation device, and sold patent rights to SHARP Electronics for US$ 1 million (later used by SHARP for the Wizard series of SHARP PDAs) • Imported Space Invaders arcade game machines from Japan to the UC Berkeley Campus. • 1980 Graduated with BA in Economics from Berkeley • Founded Unison in Oakland, CA (acquired by Kyocera) • 1981 returned to Japan, and founded SoftBank Capital • 1995 acquired 37% ofYAHOO, buildsYAHOO-Japan, and acquires controlling interest in e-Trade • 1996 acquired COMDEX and KingstonTechnology • 2001 based on acquisition ofTokyo-Metallic, foundsYAHOO-BB, which becomes Japan’s leading ADSL broadband internet provider • Campaigns for several years to obtain mobile operator license in Japan, which he is granted in December 2005 • March 17, 2006: agrees withVodafone plc to acquireVodafone KK • October 1, 2006:Vodafone KK renamed SoftBank Mobile KK and trading under the brand “SoftBank”. • October 2012: acquired eAccess/eMobile and SPRINT for Softbank
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 EACCESS, EMOBILE 98 more about eMobile and eAccess: http://www.eurotechnology.com/store/emobile/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 DR SACHIO SEMMOTO 99 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 intially 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
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 WILLCOM (TO BE MERGED INTO EMOBILE AND SOLDTOYAHOO KK) 105
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014106 Willcom Founded Oct. 1, 1990: founded as DDI-Pocket (80.93% KDDI, 13.25% Kyocera) 2004 spun out of KDDI, and renamed Willcom Founder Headquarters Tokyo Stock Exchange - Consolidated sales YEN 254.6 Billion (US$ 2.9 Billion) (March 2008, rehabilitation application) Number of employees 1038 (March 31, 2008) Major share holders under corporate rehabilitation under Softbank sponsorship Major business areas mobile communications based on PHS network
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 WIRELESS CITY PLANNING 111
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 WIRELESS MARKETS, MOBILE COMMUNICATIONS 115
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 SPECTRUM ALLOCATION AND MOBILE BASE STATIONS 116
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 RADIO SPECTRUM ALLOCATION FOR MOBILE COMMUNICATIONS 117 Radio spectrum allocation in Japan is decided by the General Affairs Ministry in process including public input through open submission and advisory committees of experts. ! Recently the General Affairs Ministry has decided on a policy of flexible frequency band re-allocation to react to changes of usage and technological advances and in particular the new needs for 3G, 3.5G, 4G wireless communications an other kinds of wireless communications such as wireless LAN etc. ! The flexible policy includes the principle, that underused frequency bands should be reallocated, and the costs of transition of previous users shall be paid out of a type of tax on new more needy users, who present a better social an economic case than previous users. ! In principle, several sections of the spectrum are under review. In particular, at present (during 2004-2005) the 800MHz band allocation is under review. Preliminary announcements have been made by the General Affairs Ministry and lead to strong worded discussions between the different interested parties. In particular,“new entrant” Softbank is arguing strongly to obtain more radio spectrum in the “Platinum” 800MHz band for new 4G services - Softbank was recently awarded “Platinum band” spectrum.
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 NOTE. 118 Note that the radio spectrum and base station data are of November 2010, and there have been some changes in spectrum allocation and base station roll-out since that date. ! We are currently working on updating this section, and the updated data will be included in one of the following editions of this report shortly. Make sure you subscribe to this report series, then we will send you the updated versions while your subscription is current. ! Subscribe here: ! subscription, monthly payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU58870246995 ! subscription, annual payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU84043119788
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 SPECTRUM ALLOCATION AND # OF BASE STATIONS 119 •This figure shows the number of base stations deployed by Japan’s mobile operators in different licensed spectrum bands •Width of bands shows actual spectrum widths, for both up- and down-link. Height of bands shows the total number of base stations deployed in all of Japan. Note that details of spectrum usage differs for different geographic regions of Japan with the highest number of base stations deployed in the Kanto (Tokyo) region. •Willcom’s next generation PHS system has been transferred into Softbank controlled Wireless City Planning Corp. •Note that changes in spectrum allocation are in preparation, and we will include details in future editions of this report. Please subscribe to be sure to receive these updates: http://www.eurotechnology.com/store/jcomm/ 
 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500 2600 2700 100 500 1000 5000 10000 50000 100000 frequency MHz Basestations Base stations vs spectrum allocation status Nov. 2010 DoCoMo PDC DoCoMo wCDMA DoCoMo wCDMA DoCoMo wCDMA LTE KDDI AU KDDI AU SoftBank SoftBank eMobile Wireless City Planning local WiMax UQ PHS c2011EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 MOBILE PHONE BASE STATION DEPLOYMENT 124
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 HOW MANY REPEATERS AND BOOSTERS ARE INSTALLED? 135 •End 2006, SoftBank started to roll-out about 120,000 boosters and repeaters to improve coverage.With ramp-up of full base-stations SoftBank is reducing the number of boosters •DoCoMo and KDDI use a much smaller number of repeaters and boosters
 Jul 2006 Jan 2007 Jul 2007 Jan 2008 Jul 2008 Jan 2009 Jul 2009 Jan 2010 Jul 2010 0 20000 40000 60000 80000 100000 120000 boosters,repeaters Cellular boosters, repeaters, IMCSs in Japan c2011EurotechnologyJapanKK www.eurotechnology.com DoCoMo KDDI AU SoftBank 3G eMobile
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 LOW POWER REPEATERS 136 •About 900,000 low power repeaters are installed in Japan for 3G reception, the largest number installed by SoftBank
 Jan 2008 Jul 2008 Jan 2009 Jul 2009 Jan 2010 Jul 2010 0 100000 200000 300000 400000 500000 600000 700000 800000 900000 Lowpowercellphonerepeaters Low power cellphone repeaters in Japan c2011EurotechnologyJapanKK www.eurotechnology.com DoCoMo 2GHz wCDMA DoCoMo 800kHz wCDMA KDDI AU 800MHz & 2GHz CDMA2000 SoftBank 2GHz wCDMA eMobile 1.7GHz wCDMA UQ 2.5GHz mWiMAX
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 FROM GROWTHTO SATURATION AND BATTLE FOR MARKET SHARES 139
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 FROM PDC AND PHSTO 3G AND LTE 143 •Japanese companies do not hesitate to switch off obsolete legacy networks •In the figure, 2G legacy networks are show as thin curves, while 3G, LTE, 4G and higher networks are shown as thick curves •DoCoMo switched off Japan’s last 2G network (NTT-docomo-PDC) in March 2012.
 Jan 2000 Jan 2002 Jan 2004 Jan 2006 Jan 2008 Jan 2010 Jan 2012 Jan 2014 LogSubscriptionNumbers Subscription numbers of Japan's mobile systems logarithmic scale 100,000 1 million 10 million 100 million DoCoMo PDC DoCoMo wCDMA HSDPA DoCoMo PHS DoCoMo LTE KDDI AU PDC KDDI AU CDMA2000 KDDI AU CDMA2000 1x KDDI AU CDMA2000 1x EVDO KDDI TuKa PDC UQ WiMax SoftBank PDC SoftBank wCDMA Willcom PHS WirelessCity Planning eMobile HSDPA ASTEL PHS iPhone SoftBank July 11, 2008 iPhone 4S SoftBank KDDI Oct 14, 2011 iPhone 5 Softbank KDDI Sept 21, 2012 Softbank acquires Vodafone KK c2014EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 PREPAID MOBILE 155
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’S PREPAID MOBILE PHONE MARKET 156 While in Italy about 90% of mobile phones are prepaid phones, in Japan less than 1% are prepaid mobile phones. Prepaid phone users are predominantly “credit challenged” people DoCoMo has only 36,400 prepaid users, less than 0.2% of all subscribers, and DoCoMo has announced that it will discontinue prepaid services DuringVodafone times, Japan’s government coalition has announced that it is working on a law which will forbid prepaid phones.This plan was then softened down, and more strict identity checks for people registering prepaid mobile phones were introduced. It was made illegal to pass registered phones to others. Prepaid phones are said in Japan to be much used for crimes such as the “ore-ore” crime, where someone phones pretending to be a relative in dire need with severe consequences, unless an amount of money is paid into a certain bank account (usually an account where the account holder cannot be identified easily)

    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’S PREPAID MOBILE PHONE MARKET 157 Japan’s prepay market is very small, less than 1% of the total mobile phone market, and shrinking. Currently SoftBank has the largest part of the prepay market, but places no importance on increasing the prepay market A large part of SoftBank’s prepay users had 2G phones.Therefore there is a sharp decrease of prepay users in April 2010, when Softbank switched off the 2G network. Prepay user numbers have slowly recovered since April 2010.The slow recovery shows that those prepay users who’s 2G phones became useless from April 2010, did not miss these phones very much, otherwise there would be a much faster recovery of prepay phones
 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 0 500000 1000000 1500000 2000000 2500000 3000000 prepayphones c2014EurotechnologyJapanKK www.eurotechnology.com Prepay phones in Japan eMobileSoftBank KDDI TuKa KDDI AU DoCoMo
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’S PREPAID MOBILE PHONE MARKET 158 Softbank has the largest share of the very small and shrinking prepay market in Japan
 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 500000 1000000 1500000 2000000 subscriptions Prepaid mobile phones in Japan DoCoMo AU TuKa SoftBank eMobile c2014EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 FROM BIRTH OF MOBILE INTERNETTO LEGACY: IMODE, EZWEB,YAHOO-KEITAI 159
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 LTE, 4G IN JAPAN 163
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 3G IN JAPAN 167
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 3G IN JAPAN 168 Japan is the first country globally to introduce 3G mobile communications: NTT-DoCoMo introduced FOMA in May 2001 for testing, and in October 2001 for the general public. KDDI followed in April 2002 and J-Phone/Vodafone in June 2002. Introduction of 3G services in Japan show most characteristics of “Disruptive Innovation” (as described in Clayton Christensen’s book “The Innovators Dilemma”) We believe that one of the reasons for the success of 3G in Japan is, that 3G was not introduced as “Premium Services” forVIP customers at high fee levels, but on the contrary, 3G services in Japan are introduced in many aspects as a discount service, bottom up. In our direct observation 3G achieved mainstream breakthrough from Spring 2003 onward: not with top paying business users, but with young people, high-school students at discount fees. You may find several surprising facts about 3G’s success in Japan. One of these facts is, that the arguable most rapid and successful introduction of 3G by KDDI was without video telephony services. While DoCoMo’s introduction of 3G services showed a “Chasm” (= gap) of about one year’s length between early adopters and mainstream, KDDI/AU succeeded in a smooth switch-over from 2G to 3G without any such “Chasm”. From 2006 - the Second Wave: in 2006 the mainstream switchover from 2G to 3G in Japan was essentially complete and we entered the second wave of 3G development. Softbank switched off 2G services in 2010, and Japan’s last 2G network was switched off by DoCoMo in March 2012
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 TRANSITION FROM 2G/PDCTO 3G 169 Japan’s last 2G phones were shipped in December 2007. Since January 2008 no more 2G handsets have been shipped in Japan. ! All 2G networks have been switched off, and all mobile phones in Japan today are either 3G or LTE phones, or PHS handsets.
 3G subscr. total 2G subscr. total 3G phones shipped total 2G phones shipped total 10 20 30 40 50 60 70 80 90 100 c2010EurotechnologyJapanKK www.eurotechnology.com Jan 2001 Jan 2002 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 shipmentssubscriptionsasoftotal mobile phone shipments and subscriptions in Japan
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 3G MARKET SHARES 170 the initial commercial introduction. KDDI was first on the market with many of the most innovative services, such as flat data plans and mobile music DoCoMo KDDI AU SoftBank eMobile c2011EurotechnologyJapanKK www.eurotechnology.com 10 20 30 40 50 60 70 80 90 100 Jan 2001 Jan 2002 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 marketshareof3Gmarket Market shares of Japan's 3G market
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 FROM “GALAKE”TO SMART PHONES 171
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 THE AU DESIGN PROJECT - IIDA 180
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 SWEETS FORTEENAGE AND SUB-TEENAGE GIRLS 188
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 RAKU-RAKU PHONES FORTHE SILVER MARKET 192
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 TUKA-S: PIONEER FORTHE SILVER MARKET 195
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 EMONEY AND MOBILE PAYMENT 198
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 FELICA WALLET PHONES 201
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 MOBILETV,“1SEG” 206
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 MOBILETV - ONESEG 210 •About 80 million handsets with mobileTV have been shipped by summer 2010 •More: http://www.eurotechnology.com/store/mobiletv/ 
 total of mobile TV phones shipped in Japan total number of mobile TV phones shipped in Japan sales started October 2005 c2011EurotechnologyJapanKK www.eurotechnology.com Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 0 10000000 20000000 30000000 40000000 50000000 60000000 70000000 80000000 90000000 100000000 110000000 120000000 totalmobileTVphonesshipped
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 FIXED LINE BROADBAND ACCESS MARKET 211
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 FTTH MARKET 214
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 3TYPES OF FTTH SERVICE 215 Type Nominal data rate Service family type, FTTH 100 Mpbs fibre (FTTH) penetrates wall into private home. mansion type typically 50Mbps FTTH to terminal in the basement. xDSL to appartments business type, FTTB 1 Gbyte or higher FTTB to business
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 FTTH: EUVS JAPAN 225 Figure shows that Japan has more installed FTTH subscriptions than all countries in EU25 + Iceland + Switzerland + Norway combined. However, in recent years FTTH development in EU has been catching up, and is expected to exceed Japan’s FTTH subscriptions in the next few years.
 2000 2002 2004 2006 2008 2010 2012 2014 0 10000000 20000000 30000000FTTHsubscriptions Japan EU25 Iceland Norway Switzerland FTTH subscriptions: EU vs Japan c2012EurotechnologyJapanKK www.eurotechnology.com
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 DSL MARKET 226
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 DSL WAS PROPELLED BYTHREE FACTORS 227 1.Deregulation (June 2001): unbundling and collocation •howeverTokyo Metallic entered the market in 1999 and went bankrupt.Was “too early”. •Was acquired by Softbank, and represents the entry by Softbank into telecommunications 2.Competition between ADSL operators (especially Softbank attacking NTT) 3.Technology development enabling 12-24Mbps
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 DSL MARKET (34 COMPANIES) (STARTED BYTOKYO METALLIC, NOW SOFTBANK, IN 1999) 228 Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 Mar 2011 Mar 2012 0 5000000 10000000 15000000 DSLsubscriptions DSL subscriptions SoftBank 38.8 eAccess 23.6 NTT East 16.9 NTT West 17.7 Other 3 c2012EurotechnologyJapanKK www.eurotechnology.com Source: http://www.eurotechnology.com/store/jcomm/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 DSL MARKET 229 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 3 c2012EurotechnologyJapanKK www.eurotechnology.com Source: http://www.eurotechnology.com/store/jcomm/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 OPTICAL ACCESS NETWORK 230
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 TRANSITIONTO NGN EXIT POTS 237
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 NTT FTTH BUSINESS DEVELOPMENT AND STRATEGY 241
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 KDDI ASTHE CHALLENGER IN FTTH 256
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’STELEGRAM MARKET 259
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 JAPAN’STELEGRAM MARKET 260 •Japan’s telegram market has been decreasing but still has a size of approximatelyYEN 52 Billion (= approx. US$ 500 Million) •Telegrams in Japan are sent mainly by businesses for congratulations, condolences, to debtors or for other urgent communications where correspondents cannot be reached by phone, and for personal congratulations at weddings etc. •Until April 2003, Japan’s telegram market was a 100% monopoly of NTT (= NipponTelegraph Telephone), and still today NTT has about 90% of the telegraph market •Currently there are about 12 companies offering competing telegraph services, among them KDDI, and Softbank (from 2009/2010). •Telegrams are often sent through the special 115 number, which is currently operated by NTT.The Ministry is considering to open 115 service to competitors of NTT, such as Softbank.
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 SUMMARY 261
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 SUMMARY: JAPAN’STELECOM MARKETS 262 •The size of Japan’s telecom operator industry alone is about US$ 200 billion in annual sales, and annual investments are on the order of US$ 30 billion •While Japan’s Government took some steps to encourage new entrants, these either failed or were acquired.As a consequence Japan’s fixed and wireless telecommunications services markets are totally dominated by three groups: •NTT - the former monopoly operator, and still today 32.6% owned by Japan’s Ministry of Finance •KDDI - with major shareholders Kyocera (12.76%),Toyota (11.09%) •Softbank - driven by founder Masayoshi Son, who also is the major shareholder, owning 21.4% •Japan introduced many services and technologies first globally, the global mobile internet revolution started with DoPa and i-Mode on February 22, 1999. However, Japan did not succeed to capture global value from this innovation, and today global leadership has been taken over by Apple’s i- Phone and Google’s Android, and Samsung has become the global handset market share leader.This effect is now generally known as Japan’s “Galapagos effect”. •Japan has more FTTH (fibre to the home) subscriptions than all of Europe, and NTT has announced to switch completely to optical Next-Generation-Networks, and to switch off traditional copper based telephone and ISDN networks. •One of the most important questions for the success of Japan’s telecom sector on the global platform this year is, whether Softbank’s acquisition of SPRINT can be successful.
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 EUROTECHNOLOGY JAPAN KK 263
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 EUROTECHNOLOGY JAPAN KK FOUNDED: FEBRUARY 1997 INTOKYO 264 Services and products - focus areas are high-technology, telecommunications, software, middle-ware, environmental technology and medical equipment: ! - Market entry to Japan for European and US high-tech companies, turn-round, reshaping, planning and building of distribution networks - European business development and strategy for Japanese companies - M&A (European and US companies acquiring Japanese companies, Japanese companies acquiring or investing in Europe) - Turn-round preparations and management of foreign business in Japan - Market research and strategy - Due diligence of high-tech companies, environmental due-diligence - Advisory services for investment fund managers and investors in technology fields ! - we publish a series of market reports for about 10 years, which are purchased world-wide, distributed direct and via distribution partners: http://www.eurotechnology.com/store/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 EUROTECHNOLOGY JAPAN KK 265 - Leading high-technology business development boutique inTokyo, working globally - Founded in 1996/1997 - 14 years experience, relationships, cooperations and success record. - CEO works with Japan’s high-tech / telecom sector since 1984 - 27 years experience, resources, cooperations. - Wide network of cooperations in Governments, Embassies, trading companies, distributors, finance, VCs, traditional corporations, venture start-ups, industry associations - Experience: market-entry, restructuring, M&A, acquisitions, due-diligence ! Customers include: - More than 100 investment fund managers - Industrial customers: - NTT-Communications, SIEMENS, DeutscheTelekom, Cubic, Unaxis (now: Oerlikon), CITI Group, CLSA Asian Markets, Genscape, Google, IKEA, Isabellenhuette, Landis+Gyr, National Instruments, Swisscom,TechnoCom, - Government - NewYork Police Department, European Union,TEKES (Technology Research funding organization of the Government of Finland) ! Deep Japanese technology market knowledge - we publish a series of market reports for about 10 years, which are purchased world-wide.You can purchase our reports on Bloomberg: https:// www.bmart.com/search?&nuts%5B%5D=WIRE%3AEUT, and via eSellerate: http://store.eSellerate.net/ s.aspx?s=STR0576176470 and from http://www.eurotechnology.com/store/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 GERHARD FASOL PROFILE: HTTP://WWW.FASOL.COM/PROFILE/ 266 - Worked successfully with Japan’s high-tech sector since 1984 - 27 years. Came first to Japan in 1984 to help build NTT’s first international R&D cooperation on semiconductor lasers - Entrepreneur inTokyo since 1996, Eurotechnology Japan KK worked with many large corporate groups (e.g. SIEMENS, NTT, DeutscheTelekom,Asahi Glass...), more than 100 investment fund managers - Assoc. Professor of Electrical Engineering atTokyo University. Record of Fasol-Laboratory atTokyo University: http://www.fasol.com/tokyo_university/ - Elite “Sakigake” (Pioneer) R&D project on Spin-Electronics of Japanese Government Science and Technology Agency.This work was evaluated by US National Science Foundation and US Department ofTrade: http://www.wtec.org/loyola/erato/ch7_5.htm - Co-initiator of spin-electronics device research in Japan, one of the first to start work on spin- electronics in Japan in 1991 - Tenured Faculty member at Cavendish Laboratory/University of Cambridge. - Assoc. Professor of Electrical Engineering atTokyo University - PhD in Solid-State Physics (Cambridge University,Trinity College, UK) - Diplom-Physiker, Ruhr-University Bochum (Diplom-Thesis on Superconductivity) - Publication list (Books, patents and publications, several publications are specifially concerning electron-spin and spin-electronics): http://www.fasol.com/profile/publications.shtml - Languages: English, German (native), French, Japanese, and some Swedish
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 GERHARD FASOL WITHTETSUZO MATSUMOTO, EXECVP OF SOFTBANK MOBILE CORPORATION 267
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 “POST GALAPAGOS STUDY GROUP” 25 JAPANESE LEADERS + 1 FOREIGNER (GERHARD FASOL) WORKING FOR ONEYEAR ON CONCEPTSTO OVERCOME JAPAN’S “GALAPAGOS EFFECT” 268 see: http://www.eurotechnology.com/2013/10/07/galapagos/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 “POST GALAPAGOS STUDY GROUP” 25 JAPANESE LEADERS + 1 FOREIGNER (GERHARD FASOL) WORKING FOR ONEYEAR ON CONCEPTSTO OVERCOME JAPAN’S “GALAPAGOS EFFECT” 269 see: http://www.eurotechnology.com/2013/10/07/galapagos/
    • (c) 2014 Eurotechnology Japan KK www.eurotechnology.com Japan’s telecom markets (Version 65) May 7, 2014 CONTACT AND MORE INFORMATION 270 Contact •Gerhard Fasol PhD •Eurotechnology Japan KK,Tokyo, Japan •http://www.eurotechnology.com/ •Mobile +81-90-8594-6291 •fasol@eurotechnology.com •gfasol@gmail.com ! More information: •reports:http://www.eurotechnology.com/store/ •twitter: http://twitter.com/gfasol/ •website: http://www.eurotechnology.com/ •personal site: http://fasol.com