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Industry Report

2280 words - 10 pages

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21510 Global Context of Management
Autumn 2011

Industry Report
Telecommunications Industry in Japan

Table of Contents
Introduction...............................................................................................................................3

The Japanese Telecommunications Industry – an overview......................................................4

The Beginning of Regulatory Reform and the Role of MIC........................................................5

Rapid World-leading Technology and Trends.........................................................................6-7

The Role of Handsets and ...view middle of the document...

.....................................................12 Appendix 5 - NTT’s Environmental Initiatives.........................................................................13

References..........................................................................................................................14-15

Introduction

Japan, as an advanced world economy and a G7 country is one of the world’s most important, dynamic and leading telecommunications countries, both in terms of market share in the Asia-Pacific region and in the development of advanced technologies. Behind the US and China, Japan is the third-largest user of broadband (Tanner 2010).

Three companies currently dominate the telecommunications in Japan through the number of subscribers, market share and in the development of new advanced technologies. This report will identify how these variables and regulatory measures have influenced and affected the industry.

The Japanese Telecommunications Industry – an overview

The Japanese telecommunications market accounts for 45.7% of the market share in the Asia-Pacific region with 163 million subscribers to fixed line and wireless accounts. The fixed line segment accounts for 51% share and the wireless accounts for 49% (Datamonitor 2010).

There are three large major leading companies in the Japanese telecommunications which have established large economies of scale; NTT Corporation, KDDI Corporation and Softbank Corporation.

Within the wireless telecommunications market segment in Japan, NTT DoCoMo, a subsidiary of NTT Corporation, is the world’s leading mobile operator (ENP Newswire 2011) and the market leader in Japan with a dominating with a 48.3% market share, followed by KDDI Corporation with 27.5% and Softbank Corporation with 18.8% (Datamonitor 2010).

The telecommunications market in Japan is competitive and there is an intense rivalry amongst the dominant carriers. Being an undifferentiated service, companies compete on quality, performance (data speed), reliability and pricing. There is a focus on the retention of existing subscribers and attraction of new subscribers as the costs to consumers of switching companies are low.

The threat of new entrants is moderate (Datamonitor 2010) and barriers to entry are relatively low, although there is high fixed capital costs associated with the set-up including construction costs of installing facilities such as base stations and networking equipment which is a deterrent for new entrants.

Appendix 1 illustrates the change in subscriber base figures from 2007 to 2010 of the top four leading companies.

The Beginning of Regulatory Reform and the Role of the Ministry of Internal Affairs and Communication (MIC) For most of the 20th century, telecommunications services in Japan were provided by Nippon Telegraph and Telephone Public Corporation...

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