Softbank vs AU KDDI Bryan Copeland May Su

Softbank. vs. AU (KDDI) Bryan Copeland & May Su Aung

Company Overview Company name SOFTBANK Focus Business Segments KDDI Broadband Infrastructure Segment High-tech investment Fixed-line Telecommunications e-Commerce Segment “Internet Culture” Segment “Broadmedia” Segment Media & Marketing Segment Overseas Funds Segment Technology Solutions Services 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 l 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 l Merger & Acquisition l Partnership (tie-up) l 41% stock ownership of Yahoo! Japan; acquired Vodafone Japan l Google pays KDDI for Adwords placements and to be default search provider l “My AU Page” personal portal service l l Yahoo Portal access “Y!” button on phone hardware Leads directly to Yahoo! Mobile search / services with Yahoo! display ads – – – Blog Mail Address Book

Most Popular Data Services l l Video download & streaming Game Downloads Music & Ringtones l GPS, Map & Navigation l Manga on-demand Location Search & Friend. Alerts Mobile web browsing Picture & video messaging l M-Commerce Transactions (online shopping via mobile) l l

Business Model

Handsets l l “Fancy-looking” phones, high-tech functionality # of Handset Models

Softbank’s Latest Handset 911 SH by Sharp 2 -Megapixel Camera l Music Player l E-comics l QR Code Reader l S! Town l Video Call l Enjoy Voice Call & E-Mail all while watching TV! l

Business Model - KDDI FTTH (Internet) Fixed-line Phone

KDDI (Handsets & Direction) l GOALS: “…to continue expanding our customer base while cultivating new business domains based on the watchwords ‘Strategy’ and ‘Speed’. ” l l Ubiquitous Network & Society agenda Maintain Net Positive Churn Rate Deal with decreasing ARPU Simple & functional handsets

KDDI’s Most Popular Handset A 5514 SA by Sanyo Global Passport l Digital Camera l Talk/Use Email & EZWeb Overseas l Safe-Navi GPS & Live Earth l Worldwide FM Radio tuner l English-Japanese Dictionary l Language Recognition (using camera)

Effect of Mobile Number Portability l Growth in Subscriber Number (net)

Effect of Mobile Number Portability l 3 G Growth (Subscriber number, by carrier)

Total ARPU l Total ARPU (year-on-year) change: ＋ ¥ 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 l Race for handset features, functionality l Minimize subscriber churn-rate l Mobile. TV, other advanced services, could be solution to ARPU problems l Customer loyalty & retention becomes increasingly important l Stiff competition to claim share of Do. Co. Mo churn as Japanese Market opens up 2. 7% 16. 4% 25. 2% 55. 7%

Analysis Softbank should: AU should: l Reduce subscriber churn by simplifying payment plans, especially for data plans l Continue to target tech-savvy users & early adopters with high-end devices l Partner with organizations such as Universities, Companies and Government departments where real savings can be made for contacts within a “white plan” network. l 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) l Aim for a portion of NTT Docomo’s less-tech enthusiast but functionfocused business users with simple yet powerful handsets l Entice NTT and Softbank customers by being the first to offer an unlimited bandwidth option for new handset models