Softbank .vs. AU (KDDI)
Bryan Copeland & May Su Aung
Company Overview
Company name
SOFTBANK
Focus
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Business
Segments
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KDDI
Broadband Infrastructure
Segment
High-tech investment
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Fixed-line
Telecommunications
e-Commerce Segment
“Internet Culture” Segment
“Broadmedia” Segment
Media & Marketing Segment
Overseas Funds Segment
Technology Solutions
Services
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Telecommunications Business
Fixed business dominance
Content partnerships
Short-term goal: secure a 30%
share of mobile market (roughly
30 million subscribers)
Mobile Music market
Mobile Search advertising
M-Payments
Exclusive licensing c
Trendy / Fashionable handsets
Outreach through KDDI Design
studio flagship store
Established (circa)
September 3, 1981
June 1, 1984
Principal Office
SOFTBANK CORP.
Tokyo Shiodome Bldg., 1-9-1,
Higashi-shimbashi,Minato-ku,
Tokyo 105-7303, Japan
3-2, Nishi-shinjuku 2-chome,Shinjukuku, Tokyo
Payment Plans
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Cheapest on paper
Many “support” plans
• Highly focused on customer needs
• Cheapest, but only if everyone you
know uses Softbank
• # of offerings can be extremely
confusing; almost ensures no two
customers pay the exact same fee
Data Access & Infrastructure
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Merger & Acquisition
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Partnership (tie-up)
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41% stock ownership of
Yahoo! Japan; acquired
Vodafone Japan
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Google pays KDDI for Adwords placements and to
be default search provider
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“My AU Page” personal
portal service
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Yahoo Portal access
“Y!” button on phone
hardware
Leads directly to Yahoo!
Mobile search / services
with Yahoo! display ads
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Blog
Mail
Address Book
Most Popular Data Services
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Video download & streaming
Game Downloads
Music & Ringtones
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GPS, Map & Navigation
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Manga on-demand
Location Search &
FriendAlerts
Mobile web browsing
Picture & video messaging
 M-Commerce Transactions
(online shopping via mobile)
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Business Model
Handsets
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“Fancy-looking” phones, high-tech functionality
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# of Handset Models
Softbank’s Latest Handset
911SH by Sharp
2-Megapixel Camera
 Music Player
 E-comics
 QR Code Reader
 S! Town
 Video Call
 Enjoy Voice Call & E-Mail
all while watching TV!
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Business Model - KDDI
FTTH
(Internet)
Fixed-line
Phone
KDDI (Handsets & Direction)
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GOALS:
“…to continue expanding our customer base while cultivating new
business domains based on the watchwords ‘Strategy’ and ‘Speed’.”
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Ubiquitous Network & Society agenda
Maintain Net Positive Churn Rate
Deal with decreasing ARPU
Simple & functional handsets
KDDI’s Most Popular Handset
A5514SA by Sanyo
Global Passport
 Digital Camera
 Talk/Use Email & EZWeb Overseas
 Safe-Navi GPS & Live Earth
 Worldwide FM Radio tuner
 English-Japanese Dictionary
 Language Recognition (using camera)
Effect of Mobile Number Portability
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Growth in Subscriber Number (net)
Effect of Mobile Number Portability
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3G Growth (Subscriber number, by carrier)
Total ARPU
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Total ARPU (year-on-year) change:
Softbank - ARPU (4yr trend)
6580
6600
6600
6530
6500
6400
yen 6300
6200
6200
6100
6000
2003
2004
2005
2006
＋ ¥20（▲0.3%）
of Voice – ¥680（▼10.3%）
of Data ＋¥700（ ▲10.6%）
▲¥490（▲6.8%）
of Voice – ¥600（▼11.3%）
of Data ＋¥110（▲5.8%）
Future
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Race for handset features,
functionality
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Minimize subscriber churn-rate
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MobileTV, other advanced services,
could be solution to ARPU problems
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Customer loyalty & retention becomes
increasingly important
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Stiff competition to claim share of
DoCoMo churn as Japanese Market
opens up
2.7%
16.4%
25.2%
55.7%
Analysis
Softbank should:
AU should:
 Reduce subscriber churn by
simplifying payment plans,
especially for data plans
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Continue to target tech-savvy
users & early adopters with
high-end devices
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Partner with organizations
such as Universities,
Companies and Government
departments where real
savings can be made for
contacts within a “white plan”
network.
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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)
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Aim for a portion of NTT
Docomo’s less-tech
enthusiast but functionfocused business users with
simple yet powerful handsets
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Entice NTT and Softbank
customers by being the first to
offer an unlimited bandwidth
option for new handset models