Japan Cell Number Portability Yet To Prompt User Movement

TOKYO -(Dow Jones)- Just over a week since the launch of a new system in Japan allowing mobile phone users to keep their numbers when they switch companies, it appears KDDI Corp. has been the main beneficiary, though most subscribers have stayed put.

Number portability went into effect throughout the country from Oct. 24. In the buildup to that, Japan's cellular operators announced a stream of new plans and offers to draw subscribers, prompting some observers to predict major migrations between the nation's three major providers.

Japan's mobile operators are due to release their monthly subscriber numbers in the middle of next week.

On Sunday, KDDI, the country's No. 2 operator by subscribers, said that in the first six days of the launch about a net 80,000 users had switched to its services, while NTT DoCoMo Corp., the largest provider, said it had lost about 60,000.

"In terms of net additional subscribers for KDDI, they are increasing, so that is good for them," said Hitoshi Hayakawa, a telecommunications analyst at Credit Suisse.

"But in terms of volume, it appears to be a bit smaller than expected."

The changes would mark a 0.4% gain in subscribers for KDDI and 0.1% loss for DoCoMo, based on nationwide user data for September. A spokesman for Softbank Mobile Corp., the No. 3 operator, said the company has yet to release official numbers.

A sales agent at Yodabashi Camera in Shinjuku, a crowded shopping district in central Tokyo, said he thought the effect had been more profound.

"From what I've seen, about 10% of subscribers are changing" and making use of the number portability system, he said. "I think DoCoMo is losing subscribers, while KDDI is gaining, as is Softbank."

The introduction of the system has been marked by dramatic price cuts, corporate squabbling, system crashes and a probe by the country's Fair Trade Commission.

The day before the new system was launched, Softbank Mobile announced a pricing plan it heavily advertised as having no charges for calls or e-mail, subject to certain conditions. The other carriers immediately responded with campaigns claiming the fees were actually higher than they appeared, and Japan's FTC said earlier this week it would investigate whether the conditions were made clear enough to consumers.

After the new system went live, Softbank Mobile's user registration system crashed, keeping users from switching and prompting criticism and demands of an explanation from KDDI and DoCoMo.

"We would have drawn more subscribers" via number portability if the crash hadn't occurred, said a KDDI spokesman.

Still, number portability is relatively young, and some feel it is hard to say what the final effect will be on Japan's mobile phone industry.

Credit Suisse's Hayakawa said that the long-term effect has yet to be determined, noting things could change with NTT DoCoMo's upcoming launch of new handsets as well as shopping seasons at the year-end holidays and during the back-to-school period in March.

-By Jay Alabaster, Dow Jones Newswires; 813-5255-2929; jay.alabaster@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 2nd November 2006