Since NTT DoCoMo, a Japanese mobile operator, announced the commercialization of the world's first WCDMA network as early as October 2001, Japan has become one of the world's most developed markets in the area of mobile data service. Japan generates a monthly mobile ARPU of US$54 representing the world's highest level. Due to high call fees, local culture and laws, mobile phones are not widely used in Japan. For instance, mobile calls are not allowed in restaurants or on public transport. As a result, subscribers have an average talk time of 154 minutes per month. Notably, mobile data services contribute to a large percentage of the mobile APRU and revenue.
When EMOBILE first entered the market, many doubted its ability to compete with the then three world-renowned 3G mobile operators in Japan: NTT DoCoMo, KDDI, and Softbank (formerly Vodafone Japan). In 2007, Japan's mobile penetration rate reached over 75% and post-paid subscribers accounted for a dominate percentage of the subscriber base. Despite the fierce competition, EMOBILE signed up around 1.41 million subscribers in just two years and secured 32% of Japan's increased market share, second only to Softbank. Given individuals' growing demand for a second mobile terminal, the rising mobile penetration rate alone is expected to attract more than 30 million new subscribers in the next 3 years, which in turn will create another growth opportunity for EMOBILE in the emerging market.
What is behind the success story of EMOBILE amid Japan's intense competition?
Unlike traditional operators, EMOBILE initially delivered mobile broadband services only. As EMOBILE believes that mobile broadband will dominate Japan's broadband market, the company is focusing on serving millions of subscribers that have a strong demand for mobile broadband services.
Eric Gan, EMOBILE's CEO and COO, stated, "In the first place, we served data subscribers only and entered the voice service market later. We are quite different from traditional operators, who focus on voice services and deliver data services only at their convenience. We are lucky to obtain new spectrum resources and start from scratch in the mobile data market by deploying a high-performance HSPA network within a short timeframe." In cooperation with Huawei, EMOBILE deployed Japan's HSPDA network that operates at a speed of up to 7.2 Mbps.
EMOBILE began to deliver voice services in March 2008 by building mobile broadband voice capabilities into subscribers' second terminals, which are increasingly widely used, such as smart phones and palm computers. As part of the initiative, EMOBILE launched a new data modem, a data card that integrates voice capabilities. Subscribers can use the data card as a mobile phone to make calls and access other voice services if their mobile phone is running out of battery or gets lost in the middle of a data service.
Further, content usually counts most in the mobile broadband area. Traditionally, operators were expected to reach beyond providing a data channel; however, EMOBILE intentionally adopts an open platform for devices and applications. This platform enables subscribers to choose from various terminals and access all computer functions. Additionally, they are given unlimited access to media content, financial information, interactive games, and security service. "We are confident of providing only one but huge 'pipeline'. We offer high-speed and low-price mobile broadband data, also a differentiated service," said Dr. Semmoto, the founder, chairman, and CEO of EMOBILE of the company's open platform. "
Oriented to Japan's well-developed and highly competitive market, EMOBILE adopts a network construction approach that combines differentiated coverage, low-cost deployment, and high-speed services.
As a highly urbanized populous country, Japan has 12 large cities with a population of more than 1 million and over 70 midsize cities that form a number of city agglomerations. In addition, Japan features a high concentration of rail traffic with Shinkansen and metro transporting a large number of passengers.
Therefore, it is vital to deliver strong coverage in subway and underground shopping centers. To address the challenge, EMOBILE employed distributed base stations to cover large cities such as Tokyo, Nagoya, and Osaka. Distributed base stations adapt ideally to these densely populated cities as they have a small footprint, significantly simplifying or even eliminating the need for site acquisition and are easy to install, shortening the time for network deployment and reducing CAPEX and OPEX. For hotspots such as subways and shopping malls, EMOBILE adopted a dedicated indoor coverage solution to enhance the coverage. In scarcely populated areas or at network edges, EMOBILE reinforced the network coverage under a roaming agreement with DoCoMo.
As a mobile operation branch of Japan's third largest broadband operator, eAccess, EMOBILE decided to fully utilize eAccess's rich IP transmission resources when it first deployed its HSPA network through an all-IP transport solution for HSPA services. According to EMOBILE's technology department, the all-IP solution can reuse eAccess's IP backbone network as well as saving transport and access network resources, thus significantly reducing network CAPEX and OPEX. "Speaking of network planning and maintenance, operators still favor Japan's experience as Japan differs largely from other countries and regions in terms of construction and network planning," said Dr. Watanabe, a renowned Japanese telecoms consultant. EMOBILE has partnered with Huawei to form a high-caliber network planning team composed of members from various countries. Currently, Japanese network planners account for 1/4 of the team, who are charged with analyzing the environment and laws in the target areas for network construction and reviewing network designs. As network construction proceeds, local network planning and optimization engineers are expected to account for more than half of the team. In terms of site acquisition, the network planning team will usually locate all the ideal sites within the same area for an engineering company to conduct negotiations in order of priority and draw up plans according to areas. Such network planning procedure mirrors the rigid style of work that characterizes Japanese and has also accelerated network planning and deployment considerably.
EMOBILE's subscribers mostly get access to mobile services through computer-based wireless Internet connections, so they call for high-quality bandwidth. Therefore, EMOBILE positioned high bandwidth as one of its competitive edges. In December 2007, EMOBILE launched 7.2 Mbps HSDPA services, positioning the company as first Japanese mobile operator to do so. In December 2008, for the first time in Japan, EMOBILE unveiled HSUPA services at a speed of up to 1.4 Mbps. In competition with traditional operators, EMOBILE feels compelled to launch faster mobile services. So far, the company has affirmed a technology evolution roadmap from HSPA+ to LTE. On March 27, 2009, its strategic 3G partner, Huawei, joined Singapore's leading mobile operator, Starhub, to launch the first commercial HSPA+ network across the Asia Pacific region, also one of the world's firsts of its kind. The cooperation between EMOBILE and Huawei tells a success story of exploring Japan's mobile broadband market.
