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Softbank .vs. KDDI

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A comparison pitting Softbank .vs. KDDI in terms of Mobile Business Strategy for the future.

One of my first eBiz team slide decks, Fall semester 2006...

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Softbank .vs. KDDI

  1. 1. Softbank .vs. AU (KDDI) Bryan Copeland & May Su Aung
  2. 2. Company Overview <ul><li>Short-term goal: secure a 30% share of mobile market (roughly 30 million subscribers) </li></ul><ul><li>Mobile Music market </li></ul><ul><li>Mobile Search advertising </li></ul><ul><li>M-Payments </li></ul><ul><li>Exclusive licensing c </li></ul><ul><li>Trendy / Fashionable handsets </li></ul><ul><li>Outreach through KDDI Design studio flagship store </li></ul><ul><li>Fixed-line Telecommunications </li></ul><ul><li>e-Commerce Segment </li></ul><ul><li>“ Internet Culture” Segment </li></ul><ul><li>“ Broadmedia” Segment </li></ul><ul><li>Media & Marketing Segment </li></ul><ul><li>Overseas Funds Segment </li></ul><ul><li>Technology Solutions Services </li></ul>Business Segments 3-2, Nishi-shinjuku 2-chome,Shinjuku-ku, Tokyo SOFTBANK CORP. Tokyo Shiodome Bldg., 1-9-1, Higashi-shimbashi,Minato-ku, Tokyo 105-7303, Japan Principal Office June 1, 1984 September 3, 1981 Established (circa) <ul><li>Telecommunications Business </li></ul><ul><li>Fixed business dominance </li></ul><ul><li>Content partnerships </li></ul><ul><li>Broadband Infrastructure Segment </li></ul><ul><li>High-tech investment </li></ul>Focus KDDI SOFTBANK Company name
  3. 3. Payment Plans <ul><li>Cheapest on paper </li></ul>Many “support” plans <ul><li>Cheapest, but only if everyone you </li></ul><ul><li>know uses Softbank </li></ul><ul><li>Highly focused on customer needs </li></ul><ul><li># of offerings can be extremely confusing; almost ensures no two customers pay the exact same fee </li></ul>
  4. 4. Data Access & Infrastructure <ul><li>Merger & Acquisition </li></ul><ul><li>41% stock ownership of Yahoo! Japan; acquired Vodafone Japan </li></ul><ul><li>Yahoo Portal access “Y!” button on phone hardware </li></ul><ul><li>Leads directly to Yahoo! Mobile search / services with Yahoo! display ads </li></ul><ul><li>Partnership (tie-up) </li></ul><ul><li>Google pays KDDI for Ad-words placements and to be default search provider </li></ul><ul><li>“ My AU Page” personal portal service </li></ul><ul><ul><li>Blog </li></ul></ul><ul><ul><li>Mail </li></ul></ul><ul><ul><li>Address Book </li></ul></ul>
  5. 5. Most Popular Data Services <ul><li>Video download & streaming </li></ul><ul><li>Game Downloads </li></ul><ul><li>Location Search & FriendAlerts </li></ul><ul><li>Mobile web browsing </li></ul><ul><li>Picture & video messaging </li></ul><ul><li>M-Commerce Transactions </li></ul><ul><li>(online shopping via mobile) </li></ul><ul><li>Music & Ringtones </li></ul><ul><li>GPS, Map & Navigation </li></ul><ul><li>Manga on-demand </li></ul>
  6. 6. Business Model
  7. 7. Handsets <ul><li># of Handset Models </li></ul><ul><li>“ Fancy-looking” phones, high-tech functionality </li></ul>
  8. 8. Softbank’s Latest Handset <ul><li>911SH by Sharp </li></ul><ul><li>2-Megapixel Camera </li></ul><ul><li>Music Player </li></ul><ul><li>E-comics </li></ul><ul><li>QR Code Reader </li></ul><ul><li>S! Town </li></ul><ul><li>Video Call </li></ul><ul><li>Enjoy Voice Call & E-Mail </li></ul><ul><li>all while watching TV! </li></ul>
  9. 9. Business Model - KDDI FTTH (Internet) Fixed-line Phone
  10. 10. KDDI (Handsets & Direction) <ul><li>GOALS: “…to continue expanding our customer base while cultivating new business domains based on the watchwords ‘Strategy’ and ‘Speed’.” </li></ul><ul><li>Ubiquitous Network & Society agenda </li></ul><ul><li>Maintain Net Positive Churn Rate </li></ul><ul><li>Deal with decreasing ARPU </li></ul><ul><li>Simple & functional handsets </li></ul>
  11. 11. KDDI’s Most Popular Handset <ul><li>A5514SA by Sanyo </li></ul><ul><li>Global Passport </li></ul><ul><li>Digital Camera </li></ul><ul><li>Talk/Use Email & EZWeb Overseas </li></ul><ul><li>Safe-Navi GPS & Live Earth </li></ul><ul><li>Worldwide FM Radio tuner </li></ul><ul><li>English-Japanese Dictionary </li></ul><ul><li>Language Recognition (using camera) </li></ul>
  12. 12. Effect of Mobile Number Portability <ul><li>Growth in Subscriber Number (net) </li></ul>
  13. 13. Effect of Mobile Number Portability <ul><li>3G Growth (Subscriber number, by carrier) </li></ul>
  14. 14. Total ARPU <ul><li>Total ARPU (year-on-year) change : </li></ul>▲ ¥490 ( ▲ 6.8% ) of Voice – ¥600 ( ▼ 11.3% ) of Data + ¥110 (▲ 5.8% ) + ¥20 ( ▲ 0.3% ) of Voice – ¥680 ( ▼ 10.3% ) of Data + ¥700 ( ▲ 10.6% )
  15. 15. Future <ul><li>Race for handset features, functionality </li></ul><ul><li>Minimize subscriber churn-rate </li></ul><ul><li>MobileTV, other advanced services, could be solution to ARPU problems </li></ul><ul><li>Customer loyalty & retention becomes increasingly important </li></ul><ul><li>Stiff competition to claim share of DoCoMo churn as Japanese Market opens up </li></ul>55.7% 25.2% 16.4% 2.7%
  16. 16. Analysis <ul><li>Softbank should: </li></ul><ul><li>Continue to target tech-savvy users & early adopters with high-end devices </li></ul><ul><li>Partner with organizations such as Universities, Companies and Government departments where real savings can be made for contacts within a “white plan” network. </li></ul><ul><li>Aim for a portion of NTT Docomo’s less-tech enthusiast but function-focused business users with simple yet powerful handsets </li></ul><ul><li>AU should: </li></ul><ul><li>Reduce subscriber churn by simplifying payment plans, especially for data plans </li></ul><ul><li>Offer a loyalty program which rewards customers for staying with the service long-term, such as complimentary downloads (can also get them interested in trying content services) </li></ul><ul><li>Entice NTT and Softbank customers by being the first to offer an unlimited bandwidth option for new handset models </li></ul>

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