Friday, October 31, 2014

The Steady March of Japanese Telecos

A couple of interesting Japan-related telecom items:

A foothold in Mexico

Yesterday the WSJ reported that Softbank, one of Japan's major players in telecommunications, is looking at possibly entering the Mexican market.

You may remember that Softbank acquired Sprint last year to enter the U.S. market. Thus far it's faced high hurdles in trying to bring Sprint's mobile network up to snuff and stanch its hemorrhaging of subscribers. It next turned to T-Mobile, and was attempting a deal which would have combined the #3 and #4 U.S. mobile carriers in a bid to challenge Verizon and AT&T.

Source: ATD

Softbank's CEO, Masatoshi Son, promised to bring stiff competition to the U.S. that he said would result in lower prices and faster speeds for consumers. Unfortunately that deal never materialized as U.S. regulators signaled heavy resistance to the idea. Four, apparently, is the magic number of competitors for this administration, even if Sprint and T-Mobile combined still trail AT&T and Verizon individually in terms of size.

Son appears to be shifting his focus, if only for the moment, to another opportunity in Mexico. Dominant telecom America Movil announced that it is divesting parts of its network in order to avoid new regulations. The word is that Softbank is examining a bid for those assets.

Customer choice at home

In other news, Japan's Ministry of Internal Affairs and Communications (MIC) is imposing a new regulation on the nation's mobile carriers. Smartphones and tablets will now from next year have to be sold with unlocked SIM cards upon customer request at no additional charge, which would eliminate the traditional two-year contract that usually binds customers in Japan (and in the US, as well).

This move is anticipated to create more price competition among the big three carriers, pushing down prices. With unlocked SIM cards, consumers will be able to easily leave their current network and sign up with a competing carrier.

Although I'd love to see a similar move in the U.S., requiring unlocked SIM cards wouldn't be enough here. There are two major mobile technologies that carriers operate their networks on in the States - CDMA and GSM. In Japan, all (that I know of) the networks are run on CDMA technology.

In the U.S., Verizon and Sprint use CDMA, while AT&T and T-Mobile use GSM. This means that phones sold by any of those carriers is only equipped for one technology - either CDMA or GSM. Even with unlocked SIM cards, consumers with a Verizon phone would only be able to go over to Sprint's network or vice versa. Likewise AT&T and T-Mobile phones would be interchangeable with each other but not the CDMA networks.

So even if politicians in the U.S. had the guts and political capital to require SIM card unlocking (I wonder at the likelihood of this, considering a law legalizing SIM card unlocking was just recently passed), it would mean little unless all phones were also required to carry chips to support both CDMA and GSM technology.

At any rate, "woot" for Japan.

1 comment:

  1. It is a good news for Japanese people that Japan's Ministry of Internal Affairs and Communications (MIC) has imposed a new regulation on the nation's mobile carriers to sell Smartphones and tablets unlocked on customer request. But as the article concludes it is still dream for a people in USA. Anyway the cell phone unlocking is no more illegal in USA as a success of petitions made online. So we have the freedom to unlock our cell phones. Recently also I unlocked my cell phone safer and easier using unlock code without any hassle. I got the unlock code for my cell phone from at affordable cost with an easy unlocking guide.