Japan Carriers' Consumer Focus the Only Focus
I was sitting in the DoCoMo shop in Machida last week waiting to cancel my second PHS data card (which we rarely use since we got a home WLAN), when it suddenly occurred to me: there’s no enterprise wireless data market in Japan because the carriers — yes, the **carriers** — don’t want one. NTT DoCoMo announced that consolidated revenues from “packet communications services” (read: i-mode) reached 715,600 million yen, up **102 percent** from the year before. Clearly, revenues from wireless data are booming, and if the corporate market has not yet been tapped, just think of the riches that will flow to the likes of DoCoMo, J-Phone, and KDDI when it is.
In previous video and mail newsmagazines, WWJ has explored Japan’s enterprise data market — the provision of integrated wireless access, software, terminals, and services to enterprises — or, more specifically, the lack such a market.
Astute readers (and all WWJ readers are by definition!) will wonder why carriers could possibly **not** want to see the rise of a vigorous enterprise market.
It would appear to be in the carrier’s best interests to establish and foster a corporate-focused package of services, particularly given corporate customers’ ability to pay a premium for services that are effective and timely, and that enhance competitiveness and contribute to the bottom line.
Case in point: in NTT DoCoMo’s Consolidated Financial Report for the Fiscal Year ended March 31, 2002 (dated May 8, 2002; see link below) the company announced that consolidated revenues from “packet communications services” (read: i-mode) reached 715,600 million yen, up **102 percent** from the year before (and accounting for 13.8% of all consolidated revenues — up from just a 7.5 percent share the year earlier). Clearly, revenues from wireless data are booming, and if the corporate market has not yet been tapped, just think of the riches that will flow to the likes of NTT DoCoMo, J-Phone, and KDDI when it is.
But these data revenues have been won in a market that is, so far, solidly consumer-centric. The DoCoMo shop I was sitting in was plastered with consumer- and individual subscriber-centric posters, adverts, discount campaigns, and new handset come-ons… all part of a solid “one subscriber, one account” sales model.
Yes, the wireless carriers here will be the first to protest and will point to their legions of sales staff serving the corporate market. But those folks are selling handsets and corporate billing to front office customers; there is, for example, no corporate i-mode mail and calendar data service from DoCoMo that will integrate with Exchange or Lotus Notes and provide packets to a fleet of terminals with compression options to save money for a sales force at a bank, a trading company, or a manufacturer (and that gets sold to the client’s back office, neatly integrated into the corporate intranet). (There is a solution of this type available from third parties, but that’s another story.)
Furthermore, the carriers here don’t want to create such a service offering because there’s no incentive to do so. Their cash cow is the consumer market; the handset makers are churning out devices that are individually designed high-tech fashion accessories (and not corporate mobile terminals), and besides no one would want to use a plain-white-box cell phone, were any handset maker to create to mobile terminal equivalent of the boring corporate PC churned out by the boatload from Dell, Compaq, Fujitsu, IBM, et al.
Even if the carriers wanted to create corporate services, they have no expertise. There are no systems engineering companies in the carriers’ groupings; all the in-house software engineering expertise is focused on the terminals and the networks — forget new business on the client SI end.
And FOMA’s expansion this coming fall (new extended battery-life handsets are due out, 3G coverage will increase) may do little to boot-strap a corporate wireless services market into existence. In a recent DoCoMo IR presentation, under “Mobile Multimedia Services – FOMA activities and plans,” the sole mention of any future “corporate” plans was:
Stimulate demand by enriching content portfolio, Launch visual mail service in fall, [and, in small type] Increase corporate applications.
This was the only occurrence of the term “corporate applications” in the 23-page presentation; the main effort for the fall appears to be infra-red-based terminal-to-terminal communications, contactless IC card m-commerce, and other mass-market services.
I’m not saying this strategy is incorrect, or that Japanese carriers shouldn’t serve their (consumer) markets. But just don’t look for integrated enterprise offerings anytime soon. (When such offerings do appear here, Java is sure to be involved — see first news item below.)
And by the way — the lady who handled my PHS card cancellation was unfailingly nice and, once served, the whole process took all of 10 minutes; I got to fiddle with the new FOMA 3G PDA while I waited. They certainly provide great consumer services… 😉
— Daniel Scuka