Japan - Telecommunication Services: A developed and attractive telecom market (Strategy, Performance and Risk Analysis)
This report provides an in depth analysis of the Japanese telecommunication market, exploring the current and forecast trends of the key segments, including fixed and mobile, changes in the competitive landscape, and benchmarking between Japan and the regional and global trends, among much more. Japan is considered a developed and attractive telecom market, offering plenty of room for growth and investments. Within the report, readers will find much more detail on such topics, along with up-to-date data to support all analysis.
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Innovative offerings to drive subscriptions
Innovation in the services of operators, such as packaging of services with voice, data and free handsets, subscriptions which involve a commitment for a fixed period of time, handsets locked to the operator, reduced handset price, and increased tariffs in service plans, have widened the scope for postpaid subscriptions.
Despite this, prepaid subscriptions are leading the market, resulting in an increase of 3.4% CAGR, from 134 million subscriptions in 2012 to 153 million in 2016, and are expected to grow further at 1.5% CAGR during 2016-2021, in order to reach 164.5 million.
Improving customer retention lowers churn
A decrease in churn rates indicates higher customer retention in the market. Operators are retaining customers due to rapid problem solving and good customer service. Japan reported a very low churn rate of 10.2% in 2016, compared to the Asia-Pacific region with a rate of 51%. Japan’s peer countries also showed to have comparatively high individual churn rates, with 35.3% by China and 20.8% by the South Korea.
Limited service differentiation due to restrictions
Adapted by the Japanese Government, there is a strategy that aims to provide a rate plan that considers the various needs of its users, reducing users' monthly payments for smartphone usage. This scheme, coupled with a higher degree of regulations, such guidelines concerning smartphone pricing and subscriber identification module (SIM) unlocking regulations, are a major concern for operators. This is due to the adverse effect both have on the financial position of the operators; as there is not much differentiation rate, the operators have difficulties attracting new customers, whilst competing at the same level with one another.