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As you know I am a big "fan of Japan" - especially when we talk mobile. The local keitai-jin already look forward to the funky mobile broadband show titled "Wireless Web 2.0". It's broadband, stupid, and it's going to be everywhere. After begging the Japanese "masters of air" very hard for a couple of years, 3 new talents have been invited to entertain the insanely profitable mobile audience. Please welcome on stage: IP Mobile, Softbank and eAccess. The new kids on the blog are very excited to play Japan as their plot, aka "All-over-IP Mobile Flat", is as simple as it should be: More value for money. Now they are busy rehearsing the rollout of their networks for the ubiquitous digital lifestyle of the 21st century. The funky mobile broadband show is going to be killer. So sit back, relax and let me fill you in with the details.

The Japanese mobile market is really big and (still) highly profitable: In FY 2004 (Financial Year ending March 2005) NTTDoCoMo, KDDI and Vodafone generated a total turnover of ¥8.5 trillion (€68 billion) with over ¥1.3 trillion (€10 billion) profits. As of 30 November 2005, the Telecommunications Carriers Association (TCA) reports 89.6 million (non-PHS) mobile subscribers of which 40.8 million (45,5%) are 3G-powered. DoCoMo serves 50.1 million subs (55,88%) of which 18.5 million (37,09%) are migrated to 3G, KDDI 24.5 million (27,33%) of which 20.1 million (82,35%) are 3G and Vodafone 15 million (16,79%) of which 2 million (13,83%) are 3G.

Monthly ARPU is probably the highest in the world: In Q3/05, DoCoMo's 3G FOMA subscribers spend ¥9.050 (€67,88) while 2G mova subs pay ¥6.140 (€46,05). The blended FOMA and mova ARPU is ¥7.050 (€52,88). KDDI's blended 3G and 2G ARPU is ¥7.190 (€53,93) with a data share of 26,29%. Significantly, KDDI's 5.5 million WIN customers (CDMA20001x EV-DO) spend ¥9.990 (€74,93) with a data share of 34,63%. 82% of the WIN subscribers have opted for a flat rate (keitai use only). In comparison, the German market currently benefits from roughly 74 million subs (counting SIM cards), a market size of €22 billion, ARPU in the area of €25,00 and a data share of 20% of which over 80% still is SMS.

To round up the mobile market briefing, let's introduce Japan's fourth MNO Willcom, co-owned by famous investment powerhouse Carlyle Group (60%), handset maker Kyocera (30%) and KDDI (10%). As a matter of fact, many mobile Japan analysts tend to overlook Willcom as its network technology is very old (PHS - Personal Handyphone System) and its customer base rather small (3.5 mio subs as of 30 November 2005). But even DoCoMo still serves 0.9 million PHS customers. Willcom also offers data flat rates though at rather low speed. Starting in December, the PHS carrier will resell NTT Communications' network of over 3.000 WLAN hotspots. Interestingly, Willcom partners with Japan Communications which is Japan's first MVNO. I expect both Willcom and Japan Communications to try joining the funky mobile broadband show as MVNOs on one of the 3 new high-speed networks from IP Mobile, Softbank or eAccess.

Scheduled for October 2006, the first new act will be IP Mobile. IP Mobile received a license for 15 MHz on the 1,7 GHz band. Since I met IP Mobile during our last Mobile Executive Tour to Tokyo in October 2005 I am confident that they will be successful although facing a couple of challenges: They are a greenfield operator without an existing customer base and, therefore, plan to invite MVNOs to help them distribute and market their network. Moreover, IP Mobile will be the only MNO in Japan using the radio technology called UMTS-TDD, aka TD-CDMA (Time Division - Code Division Multiple Access), developed and provided by IP Wireless. This means smaller economies of scale that usually have a big effect on the availability and cost of base stations, network equipment and devices. Still, UMTS-TDD is an international standard specified by 3GPP and has been deployed in over 20 markets. UMTS-TDD is supposed to offer very good spectral efficiency optimised for super fast and flexible data transfers with low latencies. Thus, IP Mobile plans to offer downlink speeds of up to 5.2 Mbps and uplink speeds of up to 858 Kbps - exactly what you need for real-time All-over-IP such as voice, video, music or games.

The other two newcomers will enter the wireless theatre in early 2007. They both have a background in the fixed broadband market worth a mere ¥76 billion (€6 billion) - 11 times smaller than the mobile market. Even worse, 495 companies are competing rather fiercely in the fixed field. Softbank owns spectrum in the 2 GHz band, will use W-CDMA HSDPA and is expected to be the main act of the funky mobile broadband show. The Softbank Group owns Yahoo Japan and has already 4.97 million ADSL Yahoo BB customers as of 30 September 2005. Softbank's recent investor presentation explains very well how Softbank will lead the Fixed Mobile Convergence to win the on-demand content game. Recently, Softbank successfully completed a handover from WiFi to Mobile WiMax to W-CDMA HSDPA and back again. Next to controlling the fixed telco Japan Telecom, Softbank builds a mighty game empire in Japan and a very mighty Internet empire in China.

The trio will be complemented by eAccess' new subsidiary eMobile that also received a license for W-CDMA HSDPA in the 2GHz band. eAccess is well established in the fixed broadband market with 2.1 mio ADSL subscribers according to its recent investor presentation. eAccess owns AOL Japan, has founded a Mobile WiMax planning group and follows a content strategy together with eMobile's strategic investor Tokyo Broadcasting System (TBS), a major TV broadcaster in Japan. In the fixed field, eAccess follows a wholesale model such that I expect them to invite mobile data MVNOs, too. Although eAccess is not as rich and diversified as Softbank I believe they are also in a good position to merge their fixed and mobile broadband services into a unique offering.

So the new talent performing in the funky mobile broadband show looks promising. They all have big visions and a superb motivation for competing with the big 3. From the start, they will rock'n'roll to kill the voice star with unlimited flat rates allowing All-over-IP on laptops and keitai. But don't forget that NTTDoCoMo, KDDI and Vodafone are among the best our mobile planet has to offer. Their only handicap will be the resistance to voluntarily increase value and decrease profits.

The audience is going to vote for the best act and I foresee mobile ovation.