Seeking Alpha
Research analyst, long/short equity, ETF investing, foreign companies
Profile| Send Message|
( followers)  

Monthly mobile phone subscriber data published by Japan’s Telecommunications Carriers Association shows NTT DoCoMo (NYSE:DCM) nearly tripled its number of new subscribers over February to 485,100 in March. Once again its monthly net new subs just edged out rival KDDI, which netted 475,800, also nearly a 3x increase, after its recently acquired Tu-ka brand lost 156,500 subs pulling down au by KDDI’s net of 632,200 new subs.

Vodafone (NASDAQ:VOD) had a better than average month more than quintupling its new subs over February to 63,400. Remember that Vodafone entered an agreement with Softbank to be bought out last month. This makes domestic competition even fiercer and may now benefit Softbank the most if it can leverage its Yahoo! Japan mobile content while continuing to promote Vodafone's discount rate plans. DoCoMo and KDDI are mired in a battle of mobile services with each rolling out something new on what seems like a weekly basis.

1,024,300 new subscribers were added in March to bring the nation wide total to 91,792,000, a 1.13% increase over February.

DoCoMo’s market share fell by .1% to 55.7% while KDDI added 0.2% to 27.7% against Vodafone’s loss of 0.1% to 16.6%.

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.

    • 45.9% (+2.4% increase over Feb.) of DoCoMo subs are 3G
    • 85.8% (+1.0%) KDDI subs are 3G
    • 20.0% (+1.9%) of Vodafone subs are 3G

As I stated last month, although Vodafone was late with its 3G system, it now represents a huge opportunity since 80% of its subscribers are still on 2G. Regardless of Softbank's acquisition, the question remains whether current 2G subscribers will loyally migrate to 3G or jump ship for a rival carrier.

DCM 1-yr chart:

VOD 1-yr chart:

Source: DoCoMo Still Reigns King in Japan, But Faces Stiff Competition (DCM, VOD)