LONDON-The cellular market in Japan is booming in both the consumer and business sectors, according to a report titled, “Mobile Communications in Asia and the Pacific 1997,” by London-based CIT Research.
The country’s consumer sector jumped from 3.7 million at the beginning of last year to more than 13 million and new consumer connections accounted for about half of all new cellular subscriptions.
“Historically, cellular services in Japan have been pricey, with the market dominated by business users,” said Phil Kendall, CIT project analyst. “Now, competition in the digital cellular market is forcing tariffs down and consumers are signing up for cellular en masse.”
The report identified more than 90 percent of last year’s new subscribers chose low-cost, low-call/personal tariff plans, a pattern continuing into this year. CIT said it expects to see Japan’s boom continue throughout the rest of the Asia-Pacific region during the next 10 years, of which two-thirds will continue to come from the low-call consumer sector.
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It further estimated that by 2006, there could be 170 million cellular subscribers in the Asia-Pacific region, 102 million of which will be ordinary customers.
Despite the seemingly good news, CIT said that low-call subscribers bring in much lower revenue than business subscribers. On average, each low-call customer in the region was billed only $700 all last year, compared with $1,011 per business subscriber. The research group expects this ratio to fall by 2006 to $200 per low-call subscriber and $400 per business subscriber. As the low-call consumer market is expected to represent more and more of the total installed base for cellular services, average billing is expected to fall from $890 in 1996 to $281 by 2006.
“As the market for mobile services matures across the region, market share in all sectors becomes more important,” Kendall said. “If you don’t service certain elements within the market, then your competitor will. The margins may be low, but operators ignoring the low-call consumer sector will find themselves losing share fast.”