KDDI battles the odds with bundling

Tony Brown/Informa Telecoms and Media
12 Dec 2011

Japanese operator KDDI has long been used to battling the odds, with a history of fighting the huge market power of incumbent NTT in the mobile and fixed-broadband markets in what is one of the most competitive and technologically advanced telecom markets in the region.

In the mobile market KDDI has long had to play second fiddle to market leader NTT DoCoMo, and it has spent several billion dollars trying to somehow remain competitive with NTT East and NTT West’s near-nationwide FTTH/B services in the fixed-broadband market by buying up independent FTTH and cable operators.

Although KDDI knows it will never have nationwide fixed-broadband networks to rival those of NTT East and West, the firm has tried to establish the widest possible network coverage, with perhaps its biggest deal being its ¥361 billion ($4.5 billion) purchase in February 2010 of a 31.1% stake in leading cable MSO Jupiter Telecommunications.

The bundling wars

KDDI is now attempting to capitalize on those investments, having announced earlier this month that it would form alliances with 43 cable-network operators across the country, principally involving operators backed by Japan Communications (J-Com) and including those owned by Japan Cable Net (JCN), in which KDDI also holds a majority stake. It is also launching joint a sales campaign to promote services.

The idea of the sales campaign, set to kick off on Thursday, is simple: KDDI will team up with the cable operators to offer subscribers a discounted bundle of services featuring fixed-line broadband, telephony and pay TV services from the cable operators and KDDI’s mobile voice and mobile broadband services.

As part of the deal, KDDI will offer cable subscribers a ¥3,000 discount when they sign up for mobile voice or mobile broadband services plus a ¥2,000 credit toward an initial KDDI mobile handset or mobile broadband device.

In addition, KDDI’s mobile subscribers will get free installation of cable-TV or cable-broadband services from the operators involved in the promotion and free fixed-line calls to KDDI fixed-line numbers.

The promotional campaign is set to be offered initially to J-Com and JCN cable subscribers in Tokyo and expanded to operators across the rest of the country in 1H12.

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