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Seasonal reflections.



AT the close of summer, many Japanese returned to their hometowns to celebrate the O-bon festival, during which Buddhists believe that their ancestors' spirits return to their homes to be reunited with the living. Tokyo's relative inactivity afforded us a chance to review recent developments in Japan's mobile phone markets.

We start with KDD KDD Knowledge Discovery and Data Mining (International Conference)
KDD Knowledge Discovery in Databases
KDD Kokusai Denshin Denwa (Japan)
KDD Key Distribution Device
, which has been doing well. It has gained market share and introduced new 3G-services with flat-rate plans for mobile Internet Refers to gaining access to the Internet using a lightweight, handheld device. See Mobile IP, PDA, smartphone and mobile TV.  access. DoCoMo followed, but Vodafone has yet to announce flat-fee services. These flat rates are only for mobile Internet services--phone browsing, downloading and email.

In Japan, flat-rate data services are only offered on the slower PHS (Personal Handyphone System) A TDMA-based cellular phone system introduced in Japan in mid-1995. Operating in the 1880-1930 MHz band, PHS uses microcells that cover an area only 100 to 500 meters in diameter, resulting in lower equipment costs but requiring more base  network. Europe launched 3G services with flat rates for data cards. In the Netherlands, KPN KPN Koninklijke PTT Nederland (Royal Dutch Telecom)
KPN Konfederacja Polski Niepodleglej (Polish conservative party) 
 offers the first GB for just 75 euro--a very attractive rate, and underpricing Underpricing

Issuing securities at less than their market value.


underpricing

The pricing of a new security issue at less than the prevailing price of the same security in the secondary market. Underpricing helps ensure a successful sale.
 Vodafone's offer.

We are concerned about the situation at Vodafone Japan. President Darryl Green resigned quite suddenly this past June. Though personal reasons were cited as the root cause, we believe discord between Green and Vodafone headquarters forced him out. Since the company became a full Vodafone Group subsidiary, Green's position must have gradually weakened.

The first signs of this were visible in April, when British headquarters sent new COO David Jones to Japan--usually an indicator of slipping confidence--prompting us to wonder if Green had gone too 'Japanese.'

[ILLUSTRATION OMITTED]

More revealing is a true assessment of Vodafone's performance in Japan over the past year--and it is hardly glowing. Vodafone has lost significant market share to KDDI, and in July, it even registered a net loss in subscribers of 3,100, while DoCoMo and KDDI gained more than 200,000 each. Vodafone will also reduce its headcount by hundreds of employees, something that is still a delicate matter here in Japan.

While DoCoMo and KDDI will use the Felica platform for mobile payments, Vodafone has not yet--as of this writing--made an official announcement.

Japan might be a playpen playpen - (IBM) A room where programmers work.

Compare salt mines.
 for new technologies in the Vodafone Group, but product strategy is being centralized in Europe. This explains why Vodafone has been reluctant to push its Vodafone Global Standard (VGS VGS Videreg√•ende Skole (Norwegian school)
VGS Virtual Game Station
VGS Voodoo Glow Skulls (Ska band)
VGS Video Game System
VGS Volunteer Gliding School
VGS Voltage Gate to Source
VGS Velocity Gate Stealer
) 3G-service in the Japanese market. The number of new handsets released was also smaller than we were expecting.

We love to use the VGS handsets though, with their international voice and data-roaming capabilities. It will be challenging for Vodafone to pick up speed on its rivals. We wouldn't have been surprised if Vodafone's new CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board.  Brian Clark was spied at Zojoji Temple near his office during O-bon--not to meet his ancestors, but to pray for wisdom and prosperity.
COPYRIGHT 2004 Japan Inc. Communications
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Japan Inc.
Date:Oct 1, 2004
Words:433
Previous Article:Atsui!
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