NRI Papers
No.91 July 1, 2005
  Creating the 20 Trillion-Yen K-tai Industry  
Shunichi KITA
      Japanese mobile phones, which have undergone a unique evolution as a communication tool in everyday life, have been leading the rest of the world. This is because of the Japanese-style incentive sales business model where the telecom revenue obtained from growing the number of users is used as a principal underlying asset. However, fears swirl at the prospect that introduction of the MNP (mobile number portability) system in 2006 and new entrants into the industry in 2007 will promote price-driven competition and spur on the recent sharp plunge in ARPU (average revenue per user), making this model unsustainable.
      Nevertheless, efforts are continuing to be made to reflect the original intention of using the mobile phone as a communication tool, create added value by merging mobile phones with fixed line communication or broadcasting and capture the advertising and sales promotion expenses of 19 trillion yen through B2B2C (Business to Business to Consumer) solutions. When those efforts bear fruit, the incentive model will be maintained and, additionally, the dream of expanding the current market of roughly 10 trillion yen to that of 20 trillion yen in 2010 is likely to become a reality. Therefore, it is inevitable that the roles played by mobile phones and the mobile phone industry are clearly defined with the intention of sharpening the competitive edge that Japanese industry already enjoys, while the parties involved in the mobile phone industry share the vision to accomplish just that.
Contents
I Continuously Evolving K-tai
II Forming the 10 Trillion-Yen K-tai Market
  1 The Japanese-Style Business Model
  2 Component Manufacturers Jump on the Bandwagon
  3 The Magic Spell That "700 Million Units" Cast
III Dwindling K-tai Market
  1 Plunge in ARPU
  2 Impacts of the MNP System and New Entrants
IV Creating the 20 Trillion-Yen K-tai Industry
  1 Reflecting the Original Intention of Mobile Phones
  2 Creating Added Value
  3 Capturing the Advertising and Sales Promotion Market
V Sharing the Vision Is Inevitable

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