Mobile and Broadband Services in Japan and South Korea: What can Western Operators Learn from their Eastern Peers?

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By Priya Mehra and Rahul Prabhakar

Abstract

Despite lagging the US and Europe a decade ago in wireless and broadband penetration, Japan and South Korea now have more developed 3G and broadband markets compared with their western peers. Mobile Internet, mobile email and mobile gaming have more than 40% penetration in Japan and South Korea compared with around 10-20% penetration in the US and Europe. The two eastern countries also lead their western counterparts in mobile TV, mobile banking, mobile wallet usage and location-based services. Further, broadband operators in the two countries have leveraged their large subscriber bases to successfully launch local language offerings such as video-on-demand, social networking, instant messaging and digital music distribution services, avenues largely unexplored by western operators.

The turnaround of the Japanese and South Korean data services markets has been driven by a number of operator initiatives. Operators have used attractive flat-rate pricing plans to reduce billing uncertainty and stimulate growth. Moreover, operators work closely with technology vendors to develop customized, feature-rich handsets and also encourage third-party vendors to develop content for their services by using vendor-friendly revenue sharing schemes and allowing unrestricted subscriber access to third-party content. Operators in other geographies can adopt some of the successful practices followed by Japanese and South Korean operators to offer mobile and broadband data services more successfully in their respective markets.