Vodafone advantage worked against it in Japan

Vodafone's advantage as a global player worked against it in Japan's unusual mobile market

As Vodafone confirmed that it is in talks with Japan's Softbank Corp to sell its Japanese subsidiary, analysts said today that Vodafone's failure to adapt to local conditions had been its downfall in Japan. 

Paradoxically, Vodafone's apparent advantages as a giant global telecoms player actually worked against it in Japan's unusual mobile market, according to Neale Anderson, research director at UK-based telecoms consultancy Ovum. 

Winning a healthy share of the booming, and hugely profitable, 3G market in Japan has long been seen as key to the success of Vodafone KK since the European telecoms giant bought and renamed Japanese operator J-Phone in 2001.

Japan got an early start in 3G thanks to NTT's ground-breaking DoCoMo service, and approximately half of Japan's 100 million mobile phones are now 3G models. 

"Vodafone KK's 3G offering has failed to take off. This is a direct result of its decision to stop sourcing Japanese handsets for the local market, in favour of leveraging its global purchasing power," said Anderson.

"Unfortunately, the centrally purchased 3G handsets have been about two years off the Japanese pace in terms of design and performance, and customers have left in droves."

Because people do not like the phones Vodafone has been offering, only 2.8 per cent of Japanese mobile phone users had signed up for Vodafone's 3G service by the end of January.

Vodafone's two competitors in Japan's 3G market, leading mobile operator NTT DoCoMo and KDDI's Au service, sourced most handsets locally and both had approximately eight times as many 3G customers as the foreign-owned company.