I recently had a rude awakening while reading an advertisement in our local newspaper. The eye-catching title was: “If you don’t speak up now, Japan’s cellular charges could remain the highest in the world.” Frightening!
The advertisement was from Softbank (Yahoo BB!’s parent company) founder, CEO and entrepreneur Masayoshi Son. A celebrity in his own right, Son shook up the Japanese stock market in late August and early September with his announcement that Softbank intended to launch both a fixed-line telephone service (which will not require NTT’s Y80,000 phone line purchase rights) and an 800Mhz wireless cellphone service.
Why should a Frugalite care about this news? Well, Son & his brainchild, Yahoo BB!, are the ones we really have to thank for Japan’s cheap broadband Internet. As Son brags in the advertisement text: “Japan’s Internet connection fees were once the highest in the world. However, thanks to price competition brought about by the Softbank Group, Japan’s broadband Internet fees are the cheapest in the world. Our ADSL service, brought to you by the Yahoo BB brand, reduced prices from close to Y10,000/month to a fifth of that cost.”
The text above, of course, is a paid advertisement. But anyone who remembers how expensive Internet access here was in the “old days” (3 to 4 years ago) will probably agree — Yahoo BB! brought prices down.
So what about cellular charges? Well, Japan’s prices are higher than they are at major mobile companies abroad. NTT DoCoMo’s average average revenue per user (ARPU) was Y94,680 PER YEAR from 2003 to 2004. Compare this to major overseas brands: Y66,776 for Vodafone Wireless (US), Y51,914 for Orange France, Y50,888 for SK Telecom (South Korea), Y49,265 for T-Mobile UK, and Y31,548 for T-Mobile Germany. (All three Japanese carriers rank higher than Verizon, by the way.)
With such advanced phones, it makes sense that Japanese would have higher data and voice use than other countries. That said, $920 US per year for cell phone service seems awfully expensive. Softbank’s ad is aimed at convincing readers to pressure lawmakers to allocate Softbank some part of the 800Mhz wireless spectrum. Whether or not this happens, developments in this area are certainly worth watching. Softbank’s Yahoo BB! service certainly threw a wrench into NTT and other major companies’ plans for broadband Internet, and I expect an interesting catfight in the fixed-line and wireless markets as well.