IP: World's Fastest Growing Mobile Communications Market

[Dave Farber <farber () central cis upenn edu>]

========================================================================
       ASIAN TECHNOLOGY INFORMATION PROGRAM (ATIP)


REPORT:  ATIP96.070 : World's Fastest Growing Mobile Communications Market
To: Distribution
From: D.K.Kahaner, [kahaner () atip or jp]
      This is file name "atip96.070" 
Date: 30 Jul 1996
ATIP96.070 : World's Fastest Growing Mobile Communications Market - Japan


ABSTRACT: Japan's Mobile Communication Market is the fastest growing
mobile communication market in the world. After achieving more than 100%
growth in 1994, the number of subscribers increased by 181% in fiscal
year 1995 which far exceeded the second fastest growing market Norway
(56%) and the US (40%). If present trends continue (all major countries
will most likely see a drop in the rate of increase in the future), the
penetration rate for mobile communication in Japan will exceed the rate
in the US by the end of 1996 and it will become the highest penetration
rate in the world by the end of 1997. The factors behind Japan's
phenomenal growth are discussed in this report, as well as future
drivers for growth.




=====================START OF REPORT ATIP96.070===========================


Copyright (c) 1996 by the Asian Technology Information Program (ATIP) 
This material may not be published, modified or otherwise redistributed
in whole or part, in any form, without prior approval by ATIP, which
reserves all rights.




        World's Fastest Growing Mobile Communications Market - Japan
                             (ATIP/JAPAN)




CONTENTS


1. ABSTRACT
2. EXECUTIVE SUMMARY


3. INTRODUCTION
4. WHY THE DRAMATIC INCREASE IN MOBILE COMMUNICATION SUBSCRIBERS?
4.1    Liberalization of handset market in April, 1994
4.2    Increased Competition from New Cellular Service Providers
4.3    Introduction of the Personal HandyPhone System (PHS) in July, 1995
4.4    Growth in the Number of  PHS and Cellular Subscribers 
     Table 1. Penetration Rates for Selected Countries
     Table 2. Cumulative Number of Subscribers for Cellular and PHS
     Table 3. Cellular & PHS Subscribers: Overall Penetration Rates
5. LEADING SUPPLIERS OF MOBILE COMMUNICATION SERVICES
5.1    Cellular Services
     Table 4. Market Shares for Cellular Service
5.2    PHS Services
     Table 5. Market Shares for PHS Service
6. FUTURE GROWTH DRIVERS IN JAPAN'S MOBILE COMMUNICATION MARKET
6.1    PHS-Based Private Branch Exchanges and PHS Home Antennas
6.2    PHS-to Pager Services
6.3    PHS-to Cellular Services
6.4    Combined PHS/Cellular Handsets and New Handset Functions
     Figure 1. Configuration of NTT's Wristwatch PHS
7. CONTACT




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2. EXECUTIVE SUMMARY


     Japan's mobile communication market is the fastest growing mobile
communication market in the world. After achieving more than 100% growth
in 1994, the number of subscribers increased by 181% in fiscal year
1995. This far exceeds the growth rates for the other leading users of
mobile communication. Japan's rate of growth (181%) in fiscal year 1995
was more than three times the growth rate of the second fastest growing
market Norway (56%) and more than four times the growth rate of the US.
A major factor in the recent rapid growth in mobile users was the
liberalization of the handset market in April, 1994, and the
introduction of the Personal HandyPhone System (PHS) in July, 1995 which
inadvertently also increased the number of subscribers to the regular
cellular service. If present trends continue the penetration rate for
mobile communication in Japan will exceed the rate in the US by the end
of 1996 and it will become the highest penetration rate in the world by
the end of 1997.


     In reality, the growth rates in all of the countries who are major
users of mobile communication services will most likely begin to drop
(Japan) or continue to drop (other major users of mobile communication)
in the near future. However, we believe that Japan's growth rate in the
near future will drop less than the other countries due to a greater
need for mobile communication, a more equal distribution of income, and
a greater supply of inexpensive mobile communication services in Japan
than in other countries. There are a large number of people including
students and workers who spend a significant fraction of their days and
evenings in a variety of places, and who require mobile communication.
The more equal distribution of income means that a larger percentage of
people can potentially afford mobile communication. The recently
introduced (July, 1995) PHS is very inexpensive (cheaper than US
cellular) compared to the average salary in Japan, the PHS service
providers are introducing new innovative services, and these low prices
and innovations are causing cellular prices to drop and new cellular
services to appear.
 
    In addition to three examples of new services presented in previous
ATIP reports (PHS-based PBX, PHS home antennas, and data communication),
other new services and products are also beginning to appear. These
include PHS-to pager services, PHS-to cellular services, combined PHS
and pager handsets, combined PHS and cellular handsets, and the future
merging of PHS, cellular, pager, laptop and personal digital assistant
terminals/handsets. Details are given in subsequent sections.