Ade SuwandaJuniarto, Ambar Tri Bawono, Wu, Pei-Hsien, Rajonti Hutajulu

Mobile Business Course

2012

Contents
Market Value ............................................................................................................................................. 2 Company History ....................................................................................................................................... 2 Softbank ................................................................................................................................................ 2 EMOBILE ................................................................................................................................................ 3 Competitiveness of Softbank and EMOBILE................................................................................................ 4 Strategies Differences: ........................................................................................................................... 4 Softbank ............................................................................................................................................ 4 EMOBILE ............................................................................................................................................ 5 Companies Milestone ............................................................................................................................ 5 Softbank Acquisition of eAccess ................................................................................................................. 6 2012 Softbank becoming the 2nd largest Internet provider in Japan........................................................ 7

By September 2012, there are more than 136 million mobile subscribers in Japan. 98% of them are using 3G service, which indicates a big market potential. NTT DoCoMo still dominates the market, with 61 million subscribers. Followed by AU, it has 36 million subscribers. The third is Softbank with 35 million subscribers. However, the market has dramatically changed since it has announced to acquire EMOBILE. Attained 4.3 million subscribers, Softbank is now the 2nd largest network service provider in Japan.

Market Value
Before we discuss the competition market in Japanese carrier, it Japan wireless telecommunication services market volume:

This total number of market volume in 2011 as 127.9 million subscribers raise into approximately 136,309,900 subscribers in total, or a 106.89% penetration rate in September 2012 (source: Wikipedia), our focus on Softbank and EMOBILE giving data as below:

Company History
Softbank
Start from Combination Founded in 1981 as a sector in Japan Telecom with the name Digital Phone, Softbank started as a wholesaler of PC software. 1999, Japan Telecom established J-PHONE by combining Digital Phone Group and Digital Group. In 2001, British mobile group Vodafone gains its share to 66.7% of Japan Telecom and 69.7% of J-Phone. 2 years later, in October 1, 2003, the name of the company has officially changed to Vodafone KK. At that time, Vodafone became the 2nd largest mobile group in Japan.

2006 Vodafone Exited Japan On the March of 2006, since Vodafone KK fail to satisfy the customers, it has outsourced for help. Finally, Vodafone KK has agreed to sell its holdings to Softbank. About half year later, in October 2006, it has announced that the company is renamed, Softbank Mobile Corp. with the mutual consent that the new name will be new, easy-to-understand and familiar. Vodafone exited Japan. 2010 Softbank Acquired PHS Operator Willcom Self-named as Bill Gates in Japan, Masayoshi Son is very ambitious in the mobile market and wouldnt let go of any chances of expanding. In 2010, as PHS operator Willcom was struggling on the edge of bankruptcy, Softbank purchased 100% share holdings of Willcom. They together signed an act call Corporate Rehabilitation of Willcom, in which they agreed to keep the name Willcom and continue to provide PHS service for customers.

EMOBILE
Established byeAcessin January 2005, EMOBILEstarted to enter Japans mobile market in March 2007. When it was first launched, EMOBILE had to fight withthe threemajoroperators in Japans telecommunication, NTTDoCoMo, KDDIandSoftbankMobile that previously exist. As a newcomer in Japan telecommunication operator business, in order to counter the dominance of the three company operators, EMOBILE needs to implement an appropriate strategy. At that point,instead of using the general strategyofmobile operators, such as built manybase stationsin order tosupport the delivery ofhigh-quality voiceservice and coverage, EMOBILE put a higher priority on data services. Now, EMOBILE is well known as a high speed, flat rate and affordable pricing mobile broadband services. Also, it has a good vision, to make broadband mobile and affordable in Japan. Actually, there are two things that differentiate EMOBILEfrom other established players. First, its priority is providing data rather than voice, means that it aims at heavy data users. Second, it has set its target for a specific subscriber base. Since EMOBILEbelieve that data revenue will grow while voice revenue declines and Japans penetration rate will be driven up by corporate subscriptions, the target market ofEMOBILEis now for business clients. The success story of EMOBILEcannot be separatedfrom the mobile market condition when the time it was firstly launched. When we look back to the past in 2007, the condition of Japans mobile market was still growing. At that time, Japans mobile market generates high average revenue per user (ARPU) and a low minute of usage per user per month (MOU). This is because trendy young people favor mobile data services and care a lot about access speed. With a lower income, they are also quite sensitive to price. To attract young and fashionable subscribers, EMOBILElaunched a strategy to provide higher access speed with lower prices, and selected appropriate equipment vendors that suitable to support its network. Related to data communication service, EMOBILE data communication service is fixed at a flat rate of 5,980 per month. There are two models to choose from currently, one is the keyboard-equipped EM ONE terminal, which allows the user to view one-segment terrestrial digital television broadcasting, and there is also a card-type model that plugs into laptop computers. In the other words, EMOBILE selling data cards together with ultra-mobile PCs, for use anytime, anywhere. In order to build its network installation, EMOBILE involve Huawei to build a major part of the network in northern Japan covering cities including Sendai and Sapporo. Also, EMOBILE contracted Ericsson to build the network in a large area of Japan from Tokyo in the east, past Nagoya in the center to Osaka in the west. In March 2006 EMOBILE selected Ericsson as one of the prime suppliers for its new WCDMA/HSDPA network. The Ericsson-supplied network will enable EMOBILE to aggressively enter the market with premium quality and high-speed mobile broadband services. Several important event and achievement was also happened in year 2009. In July 2009, EMOBILE together with Huawei launched Japans first HSPA+ network, fortifying its leading broadband market
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position and strong brand recognition. Then, in December 2009, the company launched a very popular mobile router product, called Pocket Wi-Fi that uses 3G technology with WiFi router functionality. Also, EMOBILE granted license of the 3.9 Generation Mobile Telecommunication System "LTE" from the Ministry of Internal Affairs and Communications (MIC) in June 2009. However,EMOBILE launch EMOBILE LTE or Next-Generation Mobile Communications Service with a maximum downlink speed of 75Mbps in March 2012 Related to the number of subscriber,EMOBILE has a good and significant trend in the increase of subscribers. Starting from 1 million subscribers in November 2008, it increased into 2 million subscribers in November 2009, and reached the largest market share of data card for 30 consecutive months at a staggering pace. In February 2011, the company passed the 3 million mobile broadband subscriber mark for the first time. Then, in March 2012, it achieved 4,000,000 subscribers in Japan.

Competitiveness of Softbank and EMOBILE

Softbank and EMOBILE are compete in Net subscriber additions (2011) addition new subscribers, amazingly Softbank that have rank 3 in the total subscribers leading in full 2 years beated both NTT DOCOMO and KDDI. The interesting in this competition is when it move from quarter 4 (Q4) in 2010 to quarter 1 (Q1) in 2011, it was all big three ofmobile carrier in Japan tend to lost their new potentialcustomers, but eAceess, which is number forth,grew steadily. However what happen in 2011 is different, KDDI made a move to have contract with apple, customers now can choose whether they can buy iPhone from Softbank or KDDI. Apple started launch iPhone 4 in June 24, 2010, in the United States, the United Kingdom, France, Germany and Japan simultaneously, and it really pay attention people in Japan, when we check on the graph, in quarter 2 (Q2) of 2011 Softbank and KDDI tend to increasing their new subscribers, while in contrary NTT DOCOMO and EMOBILE tend to decrease. Yet, EMOBILE tend to decline in slightly slope compare to NTT DOCOMO.

Strategies Differences:
Softbank SOFTBANK's mobile communications segment is operated with SOFTBANK MOBILE Corp. as its core operator. Following the acquisition of Vodafone K.K., SOFTBANK MOBILE made four commitments(1)
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Network Enhancement; (2) Handset Enhancement; (3) Mobile Content Enhancement; and (4) Sales Structure and Branding Enhancementand worked swiftly to raise its competitiveness. Software is known has aggressive acquisition in their historical company milestone; it has various partnerships in Japanese subsidiaries of foreign companies such as Yahoo!, E-Trade, Ustream.tv, EF Education First and Morningstar. SBI Group is a Japanese financial services company that began in 1999 as a branch of SoftBank.One of the succes strategy that Softbanks implement is when they began execlusively made contract as official carrier of the iPhone, until the release of iPhone 4S when it became available on au by KDDI as well. EMOBILE Differentiate in term of selling only data services with the latest technology at the beginning, and it seem that this strategy was relative success; however, EMOBILEthink that they need to entering voice service as well to be able to compete with the big three in Japan. eMobile tend to have core competence in servicing data service at that time, and without any knowledge and skill in servicing voice, they began to learnfromNTT DOCOMO.EMOBILEthen start to offer voice service, they are becoming more popular. Between March 2007 and March 2008 they expanded their voice communication service area to a nationwide level. As of March 31, 2009 their web site is claiming 90% coverage of Japan's population. It was claim by EMOBILE that they were the first Japanese carriers that already have 100 percent HSPA+ coverage.

Companies Milestone
Softbank
1995 - Bought COMDEX from The Interface Group 1999 - Allowed organizers of COMDEX to restrict admission of media, creating a spiraling effect 2001 - Sold COMDEX to Key3Media, a spin-off of Ziff Davis January 28, 2005 - SoftBank becomes the owner of the Fukuoka SoftBank Hawks, a Nippon Professional Baseball team. March 17, 2006 - SoftBank announces its agreement to buy Vodafone Japan, giving it a stake in Japan's $78 billion mobile market. Early April, 2006 - SoftBank completed the purchase of 23% of Betfair, an Internet betting exchange. October 1, 2006 - Vodafone Japan changes its corporate name, mobile phone brand name, and its mobile phone domain name to SoftBank Mobile, SoftBank, and [mb.softbank.jp] respectively. January 28, 2008 - It was announced that SoftBank and Tiffany & Co. collaborated in making a limited 10 model-only cellphone. This cellphone contains more than 400 platinum diamond, totalling more than 20 carat. The cost is said to be more than 100,000,000 yen. June 4, 2008 - SoftBank Mobile announced partnership with Apple and brought the iPhone (3G) to Japan later in 2008 February 3, 2010 - SoftBank acquired 13.7% in Ustream with the option to increase shares to 30% by July 2011. October 1, 2010 - Ayumi Hamasaki becomes the commercial spokesperson.

EMOBILE
EMOBILE has a reseller/virtual network arrangement with several fix line ISPs including Asahi Net. As with most 3G/HSPA networks customers have reported congestion problems in some locations at peak times. As of April 17, 2009 they introduced HSUPA to metropolitan areas claiming support for 5.8Mbit/s. At the end of 2010, they will add the HTC Aria to their smart phone offerings. As of early 2011, 21Mbit/s HSPA+ and 42Mbit/s DC-HSDPA is available in major metropolitan areas, depending upon the subscriber modem used. On March 15, 2012, they are beginning LTE service with initial advertised speeds of 75Mbit/s. It is claimed that this speed will eventually increase to 112Mbit/s. Total subscribers as of April 30, 2009 was 1.53 million (ref web site).

Source: Wikipedia.com

Softbank Acquisition of eAccess

In October 1st, 2012, Softbank and eAccess announced a share exchange agreement. Softbank is paying 180.2bn ($2.3bn) to buy stock in eAccess, the firm behind EMOBILE. Softbank will become the sole parent company of eAccess and eAccess will become its wholly-owned subsidiary of Softbank. eAccess common shares will be delisted from Tokyo Stock Exchange in late February 2013 if the share exchange approved by the shareholders and other necessary procedures. Financial Results of Past 3 Years

Source: http://www.softbank.co.jp/en/news/press/2012/20121001_01/

The purpose of the share exchange is to provide a structure that allows both companies to combine management resources effectively and efficiently, and accelerate the penetration of the mobile broadband service. The company is targeting synergies of 360bn, split betweencustomer base expansion (200bn), network sharing (110bn) and "other management efficiencies" (50bn). In addition, Softbank will gain http://www.unwiredinsight.com/2011/emobile-japan-lte-new-entrants more spectrums for its already mixed bag of FDD and TDD frequencies, the latter also the result of acquiring a smaller player, the 4G element of PHS operator Willcom. E-Mobile has a network of 10,000 3G and/or LTE base stations running in the 1.7GHz band while Softbank boasts 20,000 in 2.1GHz, as well as its TD-LTE deployment in 2.5GHz.

2012 Softbank becoming the 2nd largest Internet provider in Japan

Since Softbank lost its key commercial advantage last year, the iPhone exclusive, Softbank has seen eMobile nibbling at his heels with its competitive datafocused plans. Softbank still sees the iPhone as the center of its consumer strategy, especially now it has secured the LTE-based iPhone 5, and the new deal will give it additional capacity to support the data-hungry device. Buying eAccess means removing competitor and gaining more scale to go after the big two. Softbank had 35m mobile subscribers as of the end of August, while e-Mobile had just 4.3m. Together, the two network provider will have 28.8% share, ahead of KDDI's 26.5% or 35.9m customers. Docomo has 60.6m subscribers, for 44.7% of the total base. This movement of Softbank put them into the 2nd largest network carrier in Japan.

Source: Softbank.com

On the public press conference October 15, 2012, Softbank has thrown the second bomb to the Internet provider market. The 3rd largest Internet provider, Sprint has sold to Softbank. With large subscribers, Softbank is now Globally No. 3 network provider. Annual revenue is estimated 64 billion.