3Q.2011 Japan Mobile OperatorForecastJapan to have 136 million mobile subscriber connections in 2015 with NTT DOCOMOtaking...
Stable subscriber growth continues in Japan                                             6.5% industry average subscriber g...
ARPU growth in Japan remains negative                                                 -5.9% industry average ARPU growth i...
Minutes of Use per Subscriber is decreasing                                          Industry average MOU/Sub is 136 minut...
Strong EBITDA growth at SOFTBANK in 2Q.2011 +5.2% INDUSTRY-AVERAGE EBITDA          Chart 4: EBITDA Growth (4Q08 – 2Q11), %...
So what is IEMR’s Forecast?                                        Total subscriber connections to reach 136 million in 20...
So what is IEMR’s Forecast?                                                                                      ARPU leve...
So what is IEMR’s Forecast?                            Stable profitability at NTT DOCOMO, KDDI, and SOFTBANK MOBILE  We f...
IE Market Research                                                                What do we do?      We Drive Enterprise ...
About IEMR      Blue Chip client base of over 100 customers      across core telco value chain . . .       Operators      ...
About IEMR      And over 200 consulting and financial services      institutions are IEMR customers© 2011 IE Market Resear...
Thank you for reading our report. If you liked what you read, please letpeople know about this site by linking to us from ...
If you would like to purchase the full report together with the      detailed Excel sheets and forecasts, please click her...
IE Market Research                                                                                              Disclaimer...
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3 Q11 Japan Mobile Operator Forecast Executive Summary

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This FreeSight report contains an executive summary of our 3Q11 Japan Mobile Operator Forecast, 2011 - 2015.



IEMR’s Mobile Operator Forecast on Japan provides over 50 operational and financial metrics for Japan’s wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2015. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 2Q2013. Mobile network operators covered for Japan include NTT DOCOMO, Inc., KDDI Corporation, SOFTBANK MOBILE Corp., WILLCOM, Inc., and EMOBILE Limited (eAccess). Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.



Notable highlights of the 3Q11 Japan Mobile Operator Forecast include:



· Stable subscriber growth continues in Japan. The operator-wide average subscriber growth (YoY) was 6.5% in 2Q.2011, up from 4.0% in 2Q.2010. Subscriber growth at SOFTBANK remains the highest among the top 3 operators in Japan. SOFTBANK’s subscriber growth (YoY) was 15.9% in 2Q.2011. The largest operator, NTT DOCOMO, saw its subscriber growth (YoY) rise from 3.0% in 2Q.2010 to 3.4% in 2Q.2011.



· The industry average monthly ARPU was US$ 58.46 in 2Q.2011, down -5.9% YoY. At the operator level, NTT DOCOMO continues to have negative ARPU growth at -4.4% in 2Q.2011 (down from -4.6% in 2Q.2010). SOFTBANK MOBILE’s monthly ARPU rose by 1.9% (YoY) to reach US$ 52.33 in 2Q.2011.

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3 Q11 Japan Mobile Operator Forecast Executive Summary

  1. 1. 3Q.2011 Japan Mobile OperatorForecastJapan to have 136 million mobile subscriber connections in 2015 with NTT DOCOMOtaking 44.8% market shareOctober 2011
  2. 2. Stable subscriber growth continues in Japan 6.5% industry average subscriber growth in 2Q.2011INDUSTRY AVERAGE SUBSCRIBERGROWTH IN THE JAPANESE WIRELESS Chart 1: Subscriber Growth (4Q08 – 2Q11), %MARKET WAS 6.5% IN THE LATEST 100%QUARTER The operator-wide average subscribergrowth (YoY) was 6.5% in 2Q.2011, up from4.0% in 2Q.2010. 50% Subscriber growth at SOFTBANK remainsthe highest among the top 3 operators inJapan. SOFTBANK’s subscriber growth(YoY) was 15.9% in 2Q.2011. 0% The largest operator, NTT DOCOMO, sawits subscriber growth (YoY) rise from 3.0%in 2Q.2010 to 3.4% in 2Q.2011. Also, WILLCOM’s subscriber growth -50%jumped from -14.4% in 2Q.2010 to 2.9% in 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q112Q.2011. EMOBILE is a relatively new operator NTT DOCOMO KDDI SOFTBANK MOBILE WILLCOME EMOBILE Industry Totalwhich entered the Japanese mobileoperator space in 2005. Its subscribergrowth rate in 2Q.2011 was 31.7%. Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 2
  3. 3. ARPU growth in Japan remains negative -5.9% industry average ARPU growth in 2Q.2011THE AVERAGE ARPU IN JAPANCONTINUES TO DECLINE Chart 2: ARPU Growth (4Q08 – 2Q11), % The industry average monthly ARPU wasUS$ 58.46 in 2Q.2011, down -5.9% YoY. 10% At the operator level, NTT DOCOMO 5%continues to have negative ARPU growth at -4.4% in 2Q.2011 (down from -4.6% in 0%2Q.2010). -5% SOFTBANK MOBILE’s monthly ARPU roseby 1.9% (YoY) to reach US$ 52.33 in -10%2Q.2011. -15% We note that EMOBILE’s ARPU (US$35.55in 2Q.2011) is much lower than the other -20%operators’ ARPUs. This is partly because,when EMOBILE entered the market, its -25%strategy was to depart from traditional 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11operators’ models where voice was the mainbusiness; EMOBILE based its market entry NTT DOCOMO KDDI SOFTBANK MOBILE EMOBILE Industry Totalexclusively on mobile broadband dataprovision. Source: IEMR © 2011 IE Market Research Corp. All rights reserved. 3
  4. 4. Minutes of Use per Subscriber is decreasing Industry average MOU/Sub is 136 minutes per month The operator-wide average Minute of Chart 3: MOU/Sub Growth (4Q08 – 2Q11), % Use (MOU) per subscriber was 136 12% minutes per month in 2Q.2011, down - 2.6% YoY. 10% MOU/Sub at KDDI was -0.7% in 8% 2Q.2011, down from 10.1% in 2Q.2010. 6% MOU/Sub at KDDI continues to be 4% higher than MOU/Sub at NTT 2% DOCOMO. 0% MOU per subscriber at KDDI and NTT -2% DOCOMO was 151 minutes and 128 -4% minutes respectively in 2Q.2011. -6% -8% 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 NTT DOCOMO KDDI Industry Total Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 4
  5. 5. Strong EBITDA growth at SOFTBANK in 2Q.2011 +5.2% INDUSTRY-AVERAGE EBITDA Chart 4: EBITDA Growth (4Q08 – 2Q11), % GROWTH IN 2Q.2011 60% • The industry average EBITDA growth rate (YoY) in 2Q.2011 was 5.2%, up from 0.3% in 2Q.2010. 40% • EBITDA growth rate (YoY) at SOFTBANK MOBILE was 14.5% in 20% 2Q.2011 (down from 30.7% in 2Q.2010). 0% • EBITDA growth rate (YoY) at NTT DOCOMO was 6.4% in 2Q.2011 (up -20% from -6.4% in 2Q.2010). -40% 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 NTT DOCOMO KDDI SOFTBANK MOBILE Industry Total Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 5
  6. 6. So what is IEMR’s Forecast? Total subscriber connections to reach 136 million in 2015 We forecast that the number of total Chart 5: Subscribers by operator (CY09 – CY15) wireless subscriber connections in 70,000 Japan will increase from 120.7 million in the end of 2010 to 136 million in the end 60,000 of 2015. Given the latest quarter numbers, our 50,000 subscribers (000s) model predicts that NTT DOCOMO will have approximately 61 million mobile 40,000 subscriber connections in 2015. 30,000 In our view, NTT DOCOMO will continue to hold a dominant position as 20,000 the largest mobile operator in Japan with a 45% market share in 2015. 10,000 On the other hand, we forecast that 0 KDDI will have 35.4 million wireless CY09 CY10F CY11F CY12F CY13F CY14F CY15F subscribers in 2015 (26% market NTT DOCOMO KDDI SOFTBANK MOBILE share). WILLCOM EMOBILE Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 6
  7. 7. So what is IEMR’s Forecast? ARPU levels in Japan to decline WE EXPECT THE OPERATOR-WIDE Chart 6: Average Revenue per User (ARPU) AVERAGE ARPU LEVEL TO per month (CY09 – CY13F), JPY DECLINE TO ABOUT JPY 4,600 IN 2013 6,000 We expect that ARPUs in Japan will 5,000 be declining over the next two years. Our forecasting model predicts that Japanese Yen (¥) 4,000 the industry average ARPU will be JPY 4,618 per month in 2013. 3,000 We expect that NTT DOCOMO’s ARPU level will continue to be higher 2,000 than those of SOFTBANK MOBILE and EMOBILE over the next two 1,000 years. 0 CY09 CY10F CY11F CY12F CY13F NTT DOCOMO KDDI SOFTBANK MOBILE EMOBILE Average Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 7
  8. 8. So what is IEMR’s Forecast? Stable profitability at NTT DOCOMO, KDDI, and SOFTBANK MOBILE We forecast that EBITDA margins at Chart 7: EBITDA margins (CY09 – CY13F), %the largest three operators will bestable over the next few years. 60% We forecast that NTT DOCOMO’sEBITDA margin will be about 48% 50%over the forecast period. KDDI’s EBITDA margin will remain 40%lower than those of its competitors atabout 42% from 2012 to 2013. 30% 20% 10% 0% CY09 CY10F CY11F CY12F CY13F NTT DOCOMO KDDI SOFTBANK MOBILE EMOBILE Average Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 8
  9. 9. IE Market Research What do we do? We Drive Enterprise Strategy in the telecoms domain by: Producing the BEST and most COMPREHENSIVE strategy coverage of the vendor and operator space in the world With over 800+ operators and 50+ vendors, we cover the strategies of more telecom operators, vendors, and markets than ALL of our competitors© 2011 IE Market Research Corp.All rights reserved. 9
  10. 10. About IEMR Blue Chip client base of over 100 customers across core telco value chain . . . Operators OEMs / ODMs Network Infrastructure Vendors© 2011 IE Market Research Corp.All rights reserved. 10 10
  11. 11. About IEMR And over 200 consulting and financial services institutions are IEMR customers© 2011 IE Market Research Corp.All rights reserved. 11 11
  12. 12. Thank you for reading our report. If you liked what you read, please letpeople know about this site by linking to us from your own website. Just copy the html code below and paste it either into a sidebar widget or a post on your own site. It would be much appreciated! Here is the code to copy/paste: <a href="https://www.iemarketresearch.com/Members/Reports/3Q11-Japan- Mobile-Operator-Forecast-2011--2015-Japan-to-have-136-million-mobile- subscriber-connections-in-2015-with-NTT-DOCOMO-taking-44-8-market-share- RID2705-1.aspx">Japan Mobile Operator Forecast</a> © 2011 IE Market Research Corp. All rights reserved. 12
  13. 13. If you would like to purchase the full report together with the detailed Excel sheets and forecasts, please click here and sign up as a member client. You can also call us at +1 604 327 4367 or email us at info@iemarketresearch.com© 2011 IE Market Research Corp.All rights reserved. 13
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