Ringing Up Subscriptions | Trends in Japan

RINGING UP SUBSCRIPTIONS:
Mobile and PHS Phone Users Top 10 Million

APRIL 25, 1996

The total number of subscriptions to mobile phones (including car phones) and PHS phones (the Personal Handyphone System enables indoor cordless phones to be used outdoors) in Japan topped the 10 million mark at the end of February 1996. A report compiled by the Ministry of Posts and Telecommunications and the communications industry indicates that this sudden growth has been spurred by lower fees for new subscriptions and reduced prices for the telephone units themselves.

Lower Subscriber Fees Boost Popularity
Mobile phone services first became available in Japan in 1979. The number of such phones in use passed the one million mark in 1991, 12 years later. This figure then began to grow dramatically, reaching 2,130,000 by the end of 1993 and 8,030,000 by the end of 1995. This year has already seen an explosive growth in new subscriptions, with a total of 9,360,000 units in use by the end of February, up 690,000 from January.

The major cause of this spiraling growth is the substantial cuts in new subscriber fees. In 1985, when Nippon Telegraph and Telephone Corp. monopolized the market, fees stood at a high 72,000 yen. But in 1991, after rival companies entered the market, this figure tumbled to just over 40,000 yen. In 1994 they fell further to around 20,000 yen. The cheapest fee currently available is a mere 4,500 yen, representing a drop to just one-sixteenth of the original charge over a decade. This is a good example of the easing of regulations--in this case, the liberalization of the communications industry--leading to consumer benefits.

Newcomer PHS Achieves One Million Mark in Eight Months
Meanwhile, PHS phones have only just gone into service, beginning in July 1995. Although PHS calls cannot be made from moving cars or trains, antennas for receiving the radio waves for these phones have been installed in underground shopping malls, as well as in downtown buildings and telephone boxes, making them usable in locations where mobile phones are not. Much lower call rates than for mobile phones have made PHS phones popular. Subscriptions reached 610,000 units by the end of last year.

Since the beginning of this year, there has been a rash of sales promotion campaigns, with agents slashing prices of PHS phone units from the previous 30,000-50,000 yen to less than 20,000 yen. This boosted sales during January and February by 400,000, giving a new total of 1,017,000. As a result, the total number of subscriptions for both mobile and PHS phones climbed to 10,377,000 at the end of February.

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