Neale Anderson, service manager at Ovum in London, was poking through the DoCoMo site recently and realized that the carrier doesn’t make explicitly clear where it reports content provider revenue — the 9 percent commission it charges official content providers to be listed on the default i-mode menu and use the carrier as billing agent. This has to be a hockey-sock full of cash.
Neale wondered if Big D incorporates this revenue into its data ARPU figures,and said, “DoCoMo’s definition of ‘pure i-mode ARPU’ is less than enlightening on this matter. I’m guessing [they don't] release the 9 percent figure as this would give the game away on the revenue-generating potential of being an i-mode content supplier.”
In general, “data revenues” for the wireless Net services (i-mode, J-Sky, EZweb) are most commonly reported as a combined figure based on packet revenues plus content fees (the 9 percent — and this varies by carrier and by content category as well). The analysts seem to focus on packet fees as the most important component (and the figure that most directly affects share prices and ARPU), whereas the content revenues are somewhat less important.
The carriers also earn “data revenue” from PHS and other networks, as well as from other services like paging. DoCoMo, for example, earns data revenue from its Do-Papacket network that users access via laptop using the cellular handset as a wireless modem. In other words, it’s a dog’s breakfast to try and figure out what seemingly innocuous statements like “data revenue” actually mean.
Neale contacted DoCoMo IR, who helped clarify where the 9 percent lives in DoCoMo accounts. In the English version of the Consolidated Financial Statements (8 May 2002),under “(2) Consolidated Statements of Income” (page 16), there’s a section titled,”Operating income from other businesses.” This includes the 9 percent (Aha!!), and amounted to 45,272 million yen in FY2002.
Neale points out that, interestingly, this revenue declined in percent terms from FY01 to 02, and adds, “there’s no way of telling which of the other businesses caused this fall.”
Finally, as WWJ suspected, DoCoMo IR also confirmed that i-mode data ARPU includes the 300 yen monthly fee payable by all registered i-moders, whether they use the service or not.
** E-moji We’ve mentioned these tiny, 17X17-pixel graphic images before, and they’re becoming more interesting. When asked if she uses e-moji “a lot,” Hanako Matsumura, a 24-year-oldTokyo office worker and J-Phone user said, “Sure! Always.”
Matsumura-san explained that e-moji are more convenient than kanji since input can be achieved in fewer key strokes — and it’s more fun. Do older people (35+ years old) use e-moji as much as teens? “Noo..,” she says, “but some of them use it.” Her favorite e-moji images are impressions (smiles, angry..), the “heart” mark, trains, bicycles, and animals (for DoCoMo and J-Phone e-moji, access the URLs below).
** DoCoMo Grabs Market Share Lead Kieran Calder, telecoms analyst at Credit Agricole Indosuez securities, reported last week that preliminary June net adds show DoCoMo has taken back market share lead. The carrier had total net adds of 518,900, down 26 percent YoY but — and this is key — up 23 percent from May. The carrier took share from both KDDI and J-Phone. By carrier, the June situation was:
–> DoCoMo: 51.5 percent of all net adds, up from a low of 32.9 percent in May. FOMA netadds (2,200) was “very weak, but not negative”
–> KDDI: Total au net adds in June was 131,400, down from 150,100 in May; at least 71 percent of 3G net adds are upgrades
–> J-Phone: 124,100 net adds for a market share of 23.9 percent — down from YTD average of 29 percent
Calder remains “negative on the sector,” and wrote that last month’s performance for DoCoMo was a turning point, “which should mark the end of expectations for an ‘orderly move to managing for market share, to managing for profitability’.” Typical for Japan, “operators just can’t help themselves from competing to show strongest performance in the most visible indicator -– monthly net adds,” says Calder.
Calder makes some good points, but we have to admit: we remain quite keen on the wireless teleco sector. But then again, we’re keitai geeks, or we wouldn’t be doing this.
– Daniel Scuka