Takeoff time for Japan's MVNOs

16 Oct 2008

Japan's MVNOs face a brighter future as the leading mobile operators are obliged not only to agree to open their networks up to interconnection with MVNOs but also to openly publish their tariffs for doing so.

The disclosure requirements are part of the Ministry of Internal Affairs and Communications' mobile revitalization plan.

'Some operators still haven't announced their MVNO tariff plans. Once that happens existing and prospective MVNO businesses will be able to more easily and more cheaply implement their business plans,' said a source in MIC's telecommunications bureau.

e-Mobile, the new 1.7-GHz operator, has published its tariffs voluntarily as it is keen to lease its network because it still has only about 750,000 subs.

However, the big three major operators have not been so keen. NTT DoCoMo was finally forced to agree to interconnection and to announce its access tariffs after Japan's MVNO pioneer, Japan Communications Inc (JCI), requested arbitration as interconnection negotiations failed to make satisfactory progress.

JCI had built its data communications business on leasing what is now WillCom's PHS network, but aims to build the next stage of its 3G network.

JCI finalized its agreement with DoCoMo in June after 20 months of negotiation that saw the company in the red. After launching a slew of new services in August, it is profitable again with its share price quadrupling so far this year.

The agreement with DoCoMo allows JCI to implement any hardware and/or handsets it wishes on DoCoMo's network without the carrier's permission. JCI CEO Frank Sanda is hoping to be able to offer Android-platform handsets to his customers in the future, and next month plans to implement a true mobile VoIP service for one of his corporate customers.

While the big three have been seeking in vain to limit interconnection with MVNOs and keep them in simple wholesaling functions, the two new 2.5-GHz licensees set to launch services in 2009 are obligated to open their networks to MVNOs under the terms of their licenses.

Unofficial data shows that 33 companies are currently engaged in MVNO activities in Japan with 13 starting business since December 2007 using the networks of eMobile and DoCoMo.

Excluding JCI, most of the MVNOs are simply wholesaling mobile data communication services at a discount.

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