Phones and Flat-Rate Data: DoCoMo Reclaims Top Spot
By Eric Lin, Wed Jul 07 22:15:00 GMT 2004

DoCoMo has reclaimed the monthly title for most new subscribers. A few months after launching a slew of new handsets and flat-rate 3G data tariffs, its FOMA service is also in the lead for new 3G subscribers as well.

For the first time in 8 months, NTT DoCoMo has taken back the lead in Japan's new subscriber figures for the month of June. Last month it added 166,300 new subscribers, while recent front runner KDDI added 153,500. Although new subscriber adds aren't as high as they used to be, both companies are making major gains upgrading subscribers from 2G to 3G services. DoCoMo led in 3G adds as well, tacking on 572, 600 new FOMA users this month. KDDI added 341,600 AU WIN users, which is impressive considering a few months ago, they didn't even have that many WIN users total.

Vodafone KK is still hanging back in the number three slot; it added 64,100 users total. However unlike DoCoMo and KDDI, Voda converted fewer of its users to 3G than it added new subscribers -- only 29,600 signed up for 3G in June. Investors still saw this gain as good enough news to bring up Vodafone's stock two percent. Kazuyo Katsuma, analyst at J.P. Morgan Securities Asia, attributes Vodafone's gains to attractive new 3G handsets as well as new 2G models. Vodafone KK also announced it is expanding its 3G coverage this month, something which helped kickstart its competitors' 3G subscriptions. Once Vodafone has stylish handsets and a complete network in place, it will still need to work on pricing. It seems flat rate data pricing has been crucial to big 3G gains for the leading two carriers, and Vodafone will need to offer that in order to seriously compete.

For a time KDDI's AU handsets, with their gains in speed and style over i-Mode, were the envy of Japan. After DoCoMo announced it's new 3G models, FOMA handsets have taken the pole position for design and features, ahead of KDDi's AU 1xRTT devices, and especially ahead KDDI's AU WIN lineup. Now that both 3G services offer flat rate data pricing, handsets and software will have a bigger impact on subscriber numbers. KDDI desperately needs to bring innovative design like the Infobar models to its 3G lineup in order to better compete with DoCoMo. Vodafone seems to be chugging along chanting "I think I can. I think I can." It's adding some innovative new handsets, including the first phone with an optical zoom lens. However the model is a PDC phone, not a 3G handset. Vodafone too, could benefit from innovative 3G handsets.

When Vodafone KK was J-Phone, it had a habit of coming up with innovative services (for instance it was the first to launch picture mail) when things were looking tough, using this lead to catch up to or even leapfrog the competition. Soon it will be the first carrier to launch karaoke handsets, could this be the next sha-mail?