Network lessons from Asia

While it is very early days for 3G in most countries, the market penetration of 3G services in Japan and South Korea has already reached 40%.
That provides valuable lessons for mobile operators in other regions, according to a new report from Analysys – which indeed is helpfully called Lessons from the Japanese and South Korean Mobile Markets.
“Data ARPUs [in Europe] are still dominated by basic SMS person-to-person messaging,” says Dr Alastair Brydon, co-author of the report. “In contrast, Japanese and South Korean operators generate a significant proportion of their total revenue from data services other than text messaging.”  
The report lists services including mobile Internet access, entertainment, ringtones and music, games, mobile TV and video, community portals and mobile transactions.
On the other hand, the Analysys researchers warns against blindly following the lead of the Asian networks. “In the race to offer new services and capabilities, operators in Japan and South Korea have sometimes failed to anticipate the full commercial implications of their actions … Innovation has not always translated into strong revenue growth.”
Despite rapid migration from 2.5G to 3G, Japanese operators have struggled to grow overall ARPU. For example, NTT DoCoMo suffered a 15% decline in overall ARPU between 2003 and 2005. Why? “Obsession with the latest technology and services in Japan has led to insufficient attention to more basic services, such as voice and messaging … Despite an average of over 400 mobile emails sent and received per 3G customer each month, messaging revenues in Japan lag those in markets with much lower usage. The pricing method adopted significantly underprices messaging and other low-bandwidth services.”
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