Business

Tourists tempted by paid, free Wi-Fi access campaigns

by Kazuaki Nagata

Staff Writer

As tourists visit Japan in increasing numbers, mobile phone operators are moving to tap the market by providing better Wi-Fi services.

NTT Docomo Inc., the largest domestic operator, and Wire and Wireless Co., a part of the KDDI Corp. group, have both rolled out trial Wi-Fi services for foreign tourists using their vast Wi-Fi infrastructure.

The lack of convenient Wi-Fi connections is often one of the major complaints of foreign visitors, and the two firms are taking separate approaches to win more of their business.

Docomo is betting on a paid Wi-Fi service that it launched in August.

Wire and Wireless, also known as Wi2, has created an app for smartphones and tablets that lets people get online for free.

Because the Wi-Fi campaigns are still in their trial period, it is unclear which business model has the edge, but each company is trying hard to expand its slice of the nation’s burgeoning tourism market.

Last month, Wi2 released an app called Travel Japan Wi-Fi that gives foreign travelers access to more than 200,000 Wi2 Wi-Fi hot spots around Japan, including at train stations, airports, restaurants and hotels.

Most smartphones and tablets sold worldwide nowadays are Wi-Fi-ready, so “we were thinking that we could come up with some business (targeting foreign tourists) with Wi-Fi,” Wi2 Executive Vice President Noboru Minami said in an interview last month.

“When we think about what we can provide, we only have Wi-Fi infrastructure. So, free Wi-Fi is the biggest thing that we can offer,” said Minami.

Wi2, a member of the KDDI group, has been setting up hot spots for its paid Wi-Fi service for both Japanese and foreign travelers. Its hot spots are also used by KDDI’s au brand smartphone users.

Wi2 tried experimenting with a paid service in the past, but this time it has decided to go with a free model. This is because it wants to create a business platform for municipalities and firms that want to lure foreign tourists to their vicinities.

Those clients pay fees to Wi2 and can send ads, sales promotions or travel information to their target audience.

Currently, the sponsors include entertainment guide PIA Corp., discount chain Don Quijote Co. and Japan Airlines Co.

In the public sector, municipalities such as Kobe and Kyoto are partners.

“We will attract foreigners to this platform, and the sponsor firms and organizations can do business there. That is what this service is about,” said Minami.

Downloading Travel Japan Wi-Fi and registering will grant users access to 60,000 hot spots. To be able to use all 200,000 spots, users will have to get a password known as a “premium code” from the sponsors.

How they obtain that code depends on which of the participating firms they approach. For instance, the code will be free when a flight ticket is purchased from Japan Airlines Co.

This motivates customers to make a purchase to secure total access to the full network of Wi-Fi hot spots.

Wi2 also collects data on the tourists’ movements, based on GPS records and the geographic location of Wi-Fi services they have accessed. This information will be stored in databases to show how foreigners get around in Japan.

The data is also sent to the sponsors so they can develop more accurate marketing strategies for inbound tourists.

Wi2 said it will still keep offering a paid service because business travelers need one that doesn’t mess around with commercial gimmicks.

Also, Wi2’s Travel Japan Wi-Fi is only available as a smartphone and tablet app, so business travelers who use a laptop to get online will be out of luck.

One major hurdle for Wi2 is how to inform potential tourists the service exists.

“We have been promoting the service quite actively to get people to download the app, although we are focusing on certain countries, as the service is still new,” Minami said.

Internet ads are the main promotional tool for now.

While Wi2 wants to develop its free Wi-Fi business model, Docomo is currently offering foreign tourists a paid Wi-Fi service on a trial basis.

Docomo Wi-Fi for Visitor was launched in August, offering access to Docomo’s roughly 150,000 hot spots at a price of ¥900 for a week or ¥1,300 for three weeks.

Those wishing to use the service can register online. Upon payment they receive a password to connect to the service.

“Wi-Fi service has been mainly for our domestic subscribers, but as inbound tourism has been growing, we were thinking that we could provide this to foreign travelers,” said Satoshi Tsuruike of the Wi-Fi business at Docomo’s M2M Business Department told The Japan Times last month.

He said Docomo chose a paid model because it wants to evaluate demand for a premium paid service among foreign travelers.

Kenji Nakayama, manager of the Wi-Fi business, said the service aims to provide an Internet connection and nothing more.

While he acknowledged that a free model with sponsors is one business model, this may inundate users with unwanted sales promotions.

“A pay business model provides only an Internet connection and we receive money for that. It is up to the users which model they want,” he said.

One problem is how the carrier can spread the word about the service to incoming travelers.

“Docomo is a familiar name to Japanese customers, but foreign customers don’t know about us, so they don’t know that Docomo’s paid Wi-Fi service exists,” Nakayama said.

Docomo has been advertising its service via the Japan National Tourist Organization and inviting influential foreign bloggers to use it in the hopes that they will write about it online, but the company is still trying to find the best way to market it.

Asked how popular the trials have been, Nakayama said he can’t say that is has been a huge success because Docomo set a high goal, “but we are surely seeing a need for this service.”