KDDI's Flat Rate Users Spend Twice as Much on Content
By Eric Lin, Mon May 03 18:30:00 GMT 2004

Makoto Takahashi, Chief of Content at KDDI, compared the habits of users on KDDI's 2G and 3G networks at the Brew Japan conference last week. Instead of focusing on speed, he focused on how pricing effects buying habits.

KDDI has millions of 2G subscribers, all of whom pay per-megabyte tariffs for 1xRTT data. Out of 340,000 3G subscribers, almost 90% have opted for the "EZ Flat" unlimited tariff for 1xEV-DO data. Takahashi compared the habits of these two groups. It's a dodgy move to split these users into flat rate vs. per packet users, but Takahashi may feel that the perceived speed of 1xRTT is often fast enough for users.

KDDI discovered that while 2G users accessed the EZ Web homepage an average of once every 10 days or so, 3G users accessed the home page an average of at least once a day. He points out this does not mean 2G users are not using data services, but instead that they jump right to their bookmarks, skipping any browsing in order to avoid additional charges.

Dottocomu helps us translate KDDI's other finding presented at the conference. 3G flat-rate users spend twice as much on content per month than 2G user per-packet users. 2G users spend an average of JPY 610 per month, while 3G users spend 1470. Takahashi believes that just as flat rate charges encourage people to browse, it also encourages users to discover and subscribe to new content.

Of course it's difficult to completely rule out the advantage of 3G speeds, especially when comparing content expidentures. KDDI has a new service where users can download pop chart hits to their handsets. It seems 3G users would more likely to use this because both they don't have to worry about additional data charge and they won't have to wait but a minute or so for the song to download. If a lower percentage of DoCoMo's FOMA users opt for their unlimited tarriff, it will be interesting for them to compare habits between flat rate and per-packet 3G users. Then we will have a better idea of exactly how flat rate pricing effects usage and buying habits.