3Q.2011 Japan Mobile Operator Forecast Japan to have 136 million mobile subscriber connections in 2015 with NTT DOCOMO taking 44.8% market share October 2011
Jun 17, 2015
3Q.2011 Japan Mobile Operator ForecastJapan to have 136 million mobile subscriber connections in 2015 with NTT DOCOMO taking 44.8% market share
October 2011
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© 2011 IE Market Research Corp.All rights reserved.
Source: IEMR
Chart 1: Subscriber Growth (4Q08 – 2Q11), %
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100%
4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
NTT DOCOMO KDDI SOFTBANK MOBILE WILLCOME EMOBILE Industry Total
INDUSTRY AVERAGE SUBSCRIBER GROWTH IN THE JAPANESE WIRELESS MARKET WAS 6.5% IN THE LATEST QUARTER
The operator-wide average subscriber growth (YoY) was 6.5% in 2Q.2011, up from 4.0% in 2Q.2010.
Subscriber growth at SOFTBANK remains the highest among the top 3 operators in Japan. SOFTBANK’s subscriber growth (YoY) was 15.9% in 2Q.2011.
The largest operator, NTT DOCOMO, saw its subscriber growth (YoY) rise from 3.0% in 2Q.2010 to 3.4% in 2Q.2011.
Also, WILLCOM’s subscriber growth jumped from -14.4% in 2Q.2010 to 2.9% in 2Q.2011.
EMOBILE is a relatively new operator which entered the Japanese mobile operator space in 2005. Its subscriber growth rate in 2Q.2011 was 31.7%.
Stable subscriber growth continues in Japan6.5% industry average subscriber growth in 2Q.2011
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© 2011 IE Market Research Corp.All rights reserved.
Source: IEMR
Chart 2: ARPU Growth (4Q08 – 2Q11), %
ARPU growth in Japan remains negative-5.9% industry average ARPU growth in 2Q.2011
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-10%
-5%
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4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
NTT DOCOMO KDDI SOFTBANK MOBILE EMOBILE Industry Total
THE AVERAGE ARPU IN JAPAN CONTINUES TO DECLINE
The industry average monthly ARPU was US$ 58.46 in 2Q.2011, down -5.9% YoY.
At the operator level, NTT DOCOMO continues to have negative ARPU growth at -4.4% in 2Q.2011 (down from -4.6% in 2Q.2010).
SOFTBANK MOBILE’s monthly ARPU rose by 1.9% (YoY) to reach US$ 52.33 in 2Q.2011.
We note that EMOBILE’s ARPU (US$35.55 in 2Q.2011) is much lower than the other operators’ ARPUs. This is partly because, when EMOBILE entered the market, its strategy was to depart from traditional operators’ models where voice was the main business; EMOBILE based its market entry exclusively on mobile broadband data provision.
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© 2011 IE Market Research Corp.All rights reserved.
Source: IEMR
Chart 3: MOU/Sub Growth (4Q08 – 2Q11), %
Minutes of Use per Subscriber is decreasingIndustry average MOU/Sub is 136 minutes per month
-8%
-6%
-4%
-2%
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4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
NTT DOCOMO KDDI Industry Total
The operator-wide average Minute of Use (MOU) per subscriber was 136 minutes per month in 2Q.2011, down -2.6% YoY.
MOU/Sub at KDDI was -0.7% in 2Q.2011, down from 10.1% in 2Q.2010.
MOU/Sub at KDDI continues to be higher than MOU/Sub at NTT DOCOMO.
MOU per subscriber at KDDI and NTT DOCOMO was 151 minutes and 128 minutes respectively in 2Q.2011.
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© 2011 IE Market Research Corp.All rights reserved.
Source: IEMR
Chart 4: EBITDA Growth (4Q08 – 2Q11), %
Strong EBITDA growth at SOFTBANK in 2Q.2011
-40%
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60%
4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
NTT DOCOMO KDDI SOFTBANK MOBILE Industry Total
+5.2% INDUSTRY-AVERAGE EBITDA GROWTH IN 2Q.2011
• The industry average EBITDA growth rate (YoY) in 2Q.2011 was 5.2%, up from 0.3% in 2Q.2010.
• EBITDA growth rate (YoY) at SOFTBANK MOBILE was 14.5% in 2Q.2011 (down from 30.7% in 2Q.2010).
• EBITDA growth rate (YoY) at NTT DOCOMO was 6.4% in 2Q.2011 (up from -6.4% in 2Q.2010).
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© 2011 IE Market Research Corp.All rights reserved.
Source: IEMR
Chart 5: Subscribers by operator (CY09 – CY15)
So what is IEMR’s Forecast? Total subscriber connections to reach 136 million in 2015
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CY09 CY10F CY11F CY12F CY13F CY14F CY15F
subs
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ers
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s)
NTT DOCOMO KDDI SOFTBANK MOBILE
WILLCOM EMOBILE
We forecast that the number of total wireless subscriber connections in Japan will increase from 120.7 million in the end of 2010 to 136 million in the end of 2015.
Given the latest quarter numbers, our model predicts that NTT DOCOMO will have approximately 61 million mobile subscriber connections in 2015.
In our view, NTT DOCOMO will continue to hold a dominant position as the largest mobile operator in Japan with a 45% market share in 2015.
On the other hand, we forecast that KDDI will have 35.4 million wireless subscribers in 2015 (26% market share).
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© 2011 IE Market Research Corp.All rights reserved.
Source: IEMR
Chart 6: Average Revenue per User (ARPU) per month (CY09 – CY13F), JPY
So what is IEMR’s Forecast?ARPU levels in Japan to decline
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CY09 CY10F CY11F CY12F CY13F
Japa
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NTT DOCOMO KDDI SOFTBANK MOBILE EMOBILE Average
WE EXPECT THE OPERATOR-WIDE AVERAGE ARPU LEVEL TO DECLINE TO ABOUT JPY 4,600 IN 2013
We expect that ARPUs in Japan will be declining over the next two years.
Our forecasting model predicts that the industry average ARPU will be JPY 4,618 per month in 2013.
We expect that NTT DOCOMO’sARPU level will continue to be higher than those of SOFTBANK MOBILE and EMOBILE over the next two years.
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© 2011 IE Market Research Corp.All rights reserved.
Source: IEMR
Chart 7: EBITDA margins (CY09 – CY13F), %
So what is IEMR’s Forecast? Stable profitability at NTT DOCOMO, KDDI, and SOFTBANK MOBILE
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CY09 CY10F CY11F CY12F CY13F
NTT DOCOMO KDDI SOFTBANK MOBILE EMOBILE Average
We forecast that EBITDA margins at the largest three operators will be stable over the next few years.
We forecast that NTT DOCOMO’sEBITDA margin will be about 48% over the forecast period.
KDDI’s EBITDA margin will remain lower than those of its competitors at about 42% from 2012 to 2013.
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