Friday, October 12, 2012

Will Softbank Mobile be hip in the US like Uniqlo?

What could Softbank Mobile possibly see in the US? Margins are thin, competition is fierce, and churn is high.

The FCC, like them or not, takes a much more active regulatory roll than their Japanese counterpart, the MIC who allows Japanese carriers do pretty much whatever they want. As a result you have a market where the cost and value of a voice and LTE data plan are exactly the same across the top three Japanese carriers, out-of-network calling costs nearly one US dollar per minute, and 2-year contracts with cancellation fees automatically renew. Forever.

Why would Softbank want to get involved in that?

Growth and rebranding

The first is what, for reasons we aren't completely sure of, business are supposed to do, and the second is what American telcos must do.

The major players in the US are consistently ranked near or at the bottom of customer service and satisfaction polls. We're cynical enough to say that it's so bad that periodic rebranding is necessary to survive. The best example is GTE, which was renowned industry wide as the benchmark for poor customer satisfaction. It was almost a joke, until about 2000-2001, when they essentially rebranded as Verizon and went on to become the number one US mobile carrier (Yes, it's technically more complicated than that).

There's not much room for either growth or rebranding for Softbank in Japan. Their image is one of shoddiness. After purchasing eAccess, what's next? Buy a baseball team? How about a web compnay and internet ISP?

Frank Sanda, CEO and Founder of Japan Communications, Inc. quipped on twitter the other day that in this day and age, it's impossible for new start-up carriers to compete with the existing companies, which is why he's focused on MVNOs.
今日朝日新聞の記者からeAccessのこときかれた。この時代通信キャリアーとして新規事業として既存キャリアーと競争する事は不可能。だからMVNOビズネスモデルを紹介したんだ。eAccessもIPmobile失敗の結果次UQも。
And, yes, he thinks UQ Wimax will be the next to fail.

Do a Uniqlo

There are just about as many MVNOs operating on Sprint's network as on AT&T and Verizon combined. Softbank could introduce service to the US as either a MVNO using's Sprint's CDMA-2000 network, or completely rename Sprint to Softbank. While the ex-JETs, eikaiwa teachers, and former military who were stationed in Japan might roll their eyes, the bulk of Americans would be none the wiser, just like any Japanese person who goes to the US and is foolish enough to pay the absurd prices offered by Docomo USA.

Uniqlo offers great products and even better prices. Here at Japan Mobile Tech, we swear by their silky dry pantsu in the summer. But in Japan they'll never be seen as a top fashion brand. Introducing the even less expensive g.u. chain, that sells almost identical merchandise, will provide room to lift Uniqlo, but there'll be no escaping their reputation in Japan. In the US, though, it's a totally different story. Uniqlo is hip?

So that's what we see as the most likely way for Softbank to go in the US. Room to grow with a public that generally is unaware of your reputation.

2 comments:

  1. http://dream.jp/mb/sim/
    pardon me, this is completely not on topic, but you and your readers may find this useful. a mvno offering a data only for <500 yen per month. I:m currently using IIJ which is slightly faster (128kbps vs. 100 here), but twice as expensive. I think I might switch companies, however, I am worried that these guys might not be fast enough for my favorite voipservice, internetcalls..

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