The introduction of 3G into the mobile phone market has increased competition as the higher bandwidth allows more scope for price cutting and new entrants to a country attempt to gain subscribers. However, the strong competition is hitting the bottom line of the carriers, and they may not be able to keep it up.
KDDI, the originator of much of the current pricing pressure in Japan, claims that data ARPU is being driven by flat-rate tariffs, as flat-rate users spend more on paid-for content such as e-books and games. However, many of its gains have come from subscribers churning from other operators – with a 22% market share overall, KDDI has taken 42% of net additions over the six months to end October.
However at the moment it seems to be the best way to get market share – which in most markets these days involves having customers churn from other carriers. Hutchison has gone up to 6.8 customers worldwide, doubling the number they had 18 weeks ago.
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