60% of Japanese Consumers Will Pay for Wireless LAN Services, says Tokyo-based Research Firm

TOKYO, Japan, Sept. 09, 2002 - According to a study of over 10,000 people owning portable notebook computer and personal digital assistants (PDAs), Japanese consumers are becoming aware of wireless LAN services but are looking for cost-effective ways to access them. The survey found that 63% of all respondents familiar with the term wireless LAN, 60% were willing to pay for a high-speed wireless LAN package if priced below 2,000 yen per month (Approx. US$16). Even greater awareness and interest was found among business users, 96% of whom were familiar with WLAN.

The WLAN market survey is part of a new study titled "The Japan Wireless LAN White Paper 2002 - 2003", produced by Tokyo-based research firm Mobile Media Japan. The study is based on an examination of over 40 wireless LAN projects and services underway across Japan. The consumer survey was conducted in collaboration with Japanese marketing firm Kikakuya, Inc.

WLAN Comes to World's most advanced wireless services. Since 1999, over 50 million Japanese consumers have signed up for mobile Internet services and are now spending an estimated 300 billion yen (US$2.4 billion) annually on wireless data. The demand for higher-speed wireless access has also so far attracted 1.3 million customers to third-generation (3G) services since they were launched in late 2002 by KDDI and NTT DoCoMo. With 5 million more users now signed up for broadband Internet, service providers are poised to launch a new channel of wireless access via WLAN.

The market received an additional push earlier this year when the Japanese government announced Ubiquitous Network Forum and proposed industry initiatives it hopes will develop new high-speed wireless infrastructure and generate 80 trillion yen (US$640 billion) in new markets by 2010.

Wide Cast of WLAN Players and Services
Since the spring, Japanese operators and manufacturers have begun rolling out new wireless access services and products for public spaces, hotels and retail facilities, and the home. The majority of services operate on the 2.4 GHz (IEEE 802.11b) and require users to have a compatible data card for
their lap top or PDA to get access. Major players include members of the NTT Group, KDDI, Japan Telecom, Softbank, Yahoo! BB, and Yozan. Wireless access to homes in the 5 GHz band (IEEE 802.11a) is also being tested by SpeedNet, a member of the Tokyo Electric Power group.

The menu of new services range from free and open hot spots (access points in public areas to fee-based security protected wireless networks for business users. Softbank and Yahoo! BB have begun offering wireless LANs at McDonald and Mister Donut outlets for free, while Mobile Internet Services provides secure access to its wireless network in Tokyo for 2000 yen ($US16) per month.

As Service Providers Test Business Models, Hot Spot Services to Feel Heat 
Although industry experts agree that high-speed ubiquitous wireless access is coming to Japan, companies are now experimenting with a wide variety of different business models to learn which will prove successful. NTT Communications, which recently launched its hot spot service, is charging individual consumers between 1600 and 2000 yen per month for access at speeds of up to 11mps. Meanwhile, NTT East has unveiled a business-to-business proposition which charges corporate customers for high speed lines and installation of wireless access points to offer their end users.

According to the Mobile Media Japan report, consumer-based commercial hot spot services in particular will face serious challenges. These companies now have to win an uphill campaign to identify their customers and overcome user concerns about coverage, cost, and possibly security. Few if any hot-spot only services will survive the coming shakeout,  says MMJ analyst Scott Muff. There is clear demand, and users are telling us they are ready for WLAN, but that they are not yet seeing the kinds of services they want. 

The survey uncovered stronger interest among business users than general consumers to seek out a hot spot, with 65% of business users stated they would be more likely to visit a coffee shop offering wireless LAN as opposed to 45% of overall respondents.

Mobile Media Japan says the Japanese market is nurturing a number of business cases that validate commercial applications of wireless LAN. In particular, the report identifies promising products that target
non-competing segments and also compliment current wireless offerings in Japan. These include WLAN services offered via existing ISPs, fixed-cost wireless IP phone, WLAN security, and home-networking capability.

About the Survey and Report
The Japan Wireless LAN User Survey was conducted in July, 2002. Data was collected via the Internet from over 19,000 individual respondents. More information is available in the Mobile Media Japan's "Japan Wireless LAN White Paper 2002 - 2003.

About Mobile Media Japan
Mobile Media Japan KK specializes in research and consulting for wireless companies operating in Japan, Europe and the USA. 

For more information: http://www.mobilemediajapan.com

MobileInfo Comments and Advisory:  Results from this survey and report are consistent with similar feedback from other countries. Interesting point is that in Japan i-mode and sub-3G services have been quite successful and WLAN has to have a better value proposition. This confirms our well-documented position that hybrid networks is the way to go in future. If WLANs make sense in Japan, it makes more sense elsewhere.