Slow April for Japanese Cell Phone Service Providers (DCM, SFTBF, VOD)

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Includes: DCM, SFTBF, VOD
by: Steven Towns

Monthly mobile phone subscriber data published by Japan’s Telecommunications Carriers Association shows that all three major Japanese service providers experienced sharp declines in the number of new subscriber additions for the month of April. This is nothing to necessarily be alarmed about as the decline was caused by details of number portability becoming available, Softbank Corp's (OTCPK:SFTBF) acquisition of Vodafone Japan, and anticipation of new handsets hitting the market.

Once again NTT DoCoMo (NYSE:DCM) led all with 253,800 new subs followed by KDDI's (Tokyo: 9433) net total of 213,700, and lastly Vodafone's (NASDAQ:VOD) 12,600. au by KDDI actually netted 353,600 new subs but was negatively impacted by the 139,900 loss of subs due to KDDI's Tu-ka acquisition.

480,100 new subscribers were added nation wide for a grand total of 92,272,100, a 0.52% increase over March.

Market share ranking as of the end of April is as follows:

    • DoCoMo 55.7% (unchanged over March)
    • KDDI 27.8% (+0.1%)
    • Vodafone 16.5% (-0.1%).

2G subs declined for all carriers as 3G subs increased across the board with laggard Vodafone having the largest increase given it also has the lowest 3G subscriber base.

    • 47.8% (+1.9% increase over Mar.) of DoCoMo subs are 3G
    • 86.6% (+0.8%) KDDI subs are 3G
    • 21.5% (+1.5%) of Vodafone subs are 3G

As I have explained with each past month's data release, although Vodafone was late with its 3G system, it now represents a huge opportunity since nearly 80% of its subscribers are still on 2G. With the finalizing of Softbank’s acquisition of Vodafone Japan, the big question continues to be whether current 2G subscribers will loyally migrate to 3G or jump ship for a rival carrier and if Softbank can attract new subscribers from its rivals.

DoCoMo, KDDI, Vodafone 1-year stock chart comparison:

Note: JP:9433 is KDDI's ticker in Japan. Vodafone's chart is representative of the entire company and not just Vodafone Japan.