3G Lessons Learnt – Buyer Beware
BusinessWire has a press release from the folks at Analysys stating that 3G in Japan has hit 40 percent penetration. While we agree that “Mobile operators in Japan and South Korea have consistently led the world in the development of innovative mobile services and technology” and “They have unrivalled track records of introducing new handset capabilities and services, and they are currently the only markets to achieve mainstream adoption of services delivered by 3G networks,” that “40” number is way too low. According to a TCA offical report, the 50 percent mark was actually reached here back in February.
Also noted in the release:
While Japan and South Korea have had some successes with non-voice services, the Analysys report warns against blindly following their lead. “In the race to offer new services and capabilities, operators in Japan and South Korea have sometimes failed to anticipate the full commercial implications of their actions,” says Alastair Brydon. “Innovation has not always translated into strong revenue growth.” Despite rapid migration from 2.5G to 3G, Japanese operators have struggled to grow overall ARPU. For example, NTT DoCoMo suffered a 15% decline in overall ARPU between 2003 and 2005.
It’s true that ARPU has been trending down. However, the carriers also have more customers — using the same network — than in 2003 and the revenue per user number was to be expected when more users who are less hardcore ‘early adopter’ types migrated to 3G (this is the well-known marginal subscriber effect).
What the report didn’t mention, at least in the public release, is that DoCoMo and KDDI have by far the highest data ARPU anywhere in the world thanks in no small part to having mature 3G offerings.
The report is priced at 1,700 GBP. We humbly suggest a week on MIJ would be a better bang for the buck!
— WWJ Editors