The much-awaited portable-number service for cell phones has started in Japan, enabling users to change carriers without having to change phone numbers. This is a new convenience for customers, but for the cell-phone carriers — NTT DoCoMo Inc., KDDI Corp. and Softbank Mobile Corp. — it heralds the start of a new war. The ease with which users can change carriers is expected to cause fierce competition. It is hoped that the competition will lead to lower fees, better services and more user options.
Under the earlier system, switching carriers was cumbersome because users’ phone numbers had to be changed, too. Users had to notify all their friends and acquaintances of the new numbers, often worrying that they might have forgotten somebody. With the new system, these worries are over. Phone numbers of users’ friends and acquaintances, registered in the old handsets, will also be transferred to new handsets.
But users will have to change their e-mail addresses, since they are not transferable. Points earned with previous carriers as well as music, game content and other data stored in the old handsets will also be lost.
Nevertheless, users should not have to worry much about notifying friends and acquaintances about their new e-mail addresses, as the carriers they switch to will automatically inform users’ friends and acquaintances — if these phone numbers are already registered in the old handsets — of the new e-mail addresses.
Portable service began in Singapore in 1997. Now it is available in 20 Asian and Western countries. The government decided in 2004 to introduce the system due to a growing number of user complaints about the time and trouble to change cell-phone numbers when carriers were switched — a decision estimated to have cost the cell-phone industry up to 140 billion yen.
Besides the loss of old e-mail addresses and downloaded data, another drawback that may give users second thoughts about changing carriers. Paperwork fees for canceling the old subscription and subscribing to the new will cost about 5,000 yen.
Therefore, Softbank Mobile Corp.’s announcement Oct. 23, one day before the number-portability service started, may increase defection from its two rival carriers: If users subscribe to Softbank Mobile’s Vodafone service by Jan. 15, they can call or send short e-mail messages to other Vodafone users as much as they want for a flat rate of 2,880 yen a month, with some conditions.
Moreover, just one handset button will link users to the mobile site of Yahoo Japan, enabling them to enjoy Yahoo contents for free, except for the transmission fee. (Calls from Vodafone handsets to NTT DoCoMo and KDDI au handsets, however, will cost more than calls among users of NTT DoCoMo or KDDI au handsets.)
The two rivals have different approaches. KDDI, for example, aims to improve handset designs as well as strengthen music and download functions.
Currently, about 94 million cell-phone handsets are in use in Japan, indicating nearly one handset for every resident. NTT DoCoMo enjoys a 56 percent market share while KDDI holds a 28 percent share; Softbank Mobile has 16 percent.
Up to 10 million users are expected to defect. Competition among the three carriers, not only in pricing and services but also in handset design and functions, may alter their division of the market pie. To prepare for the start of the number-portability service, the carriers have developed new types of handsets, pricing systems and networks. The days in which mobile phones were intended only for placing and receiving telephone calls, and sending and receiving e-mail messages, are gone.
The performance of handsets are now diversified to meet various user demands. Some not only have camera, TV or music functions but also function like personal computers, proving quite powerful in retrieving information from the Internet. Others are specially designed for easy use by elderly people. Still others include credit or prepaid card functions.
Thus an array of choices is offered in terms of services and functions. As users decide which carrier to use according to pricing and preferred services and functions, competition among carriers will increase. It is a challenging time for the carriers. They must attract picky longtime users as well newcomers.
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