Japanese cellular subscriber growth hits quarterly low

New subscriptions to cellular telephone services in Japan during the third quarter totaled 1.96 million -- the first time quarterly new-subscriber numbers have been below 2.0 million since records began being collected in 1996. Behind the slowing growth in new subscriptions is the increasing penetration rate of cellular services in Japan, which now stands at over 56 percent.

At the end of September, the total number of mobile-telephone subscriptions was 71.1 million, according to the Telecommunications Carriers Association (TCA). Of these, the vast majority, some 65.4 million, subscribed to conventional cellular services with the remaining 5.7 million using the lower power Personal Handyphone System (PHS) services.

With 58.8 percent of total cellular subscriptions, NTT DoCoMo Inc. maintained its commanding lead over its competitors although the company has seen its market share fall slightly, from 58.9 percent, at the end of June. In the third quarter, it reported 1.1 million new customers, down from the 1.3 million it signed up during the second quarter.

J-Phone Co. Ltd. saw the most improvement over the quarter. The U.K.'s Vodafone Group Plc recently announced plans to extend its existing stake in J-Phone into majority control of the company. J-Phone's market share among cellular users rose from 16.6 percent to 17 percent, primarily as a result of a heavy advertising campaign that targeted teens and promoted a line of handsets that includes built-in digital still cameras. New subscriptions in the quarter totaled 582,000, up on the 540,000 the company reported for the second quarter.

KDDI Corp.'s Au saw its share fall from 18.2 percent to 18.1 percent over the quarter and Tu-Ka, which is also owned by KDDI but is up for sale, saw its share fall from 6.3 percent to 6.2 percent.

In the mobile Internet sector, total subscriptions were 44.9 million at the end of September, up 11.3 percent on the quarter. NTT DoCoMo's I-mode service led the market with a 61.8 percent share and was followed by J-Phone's J-Sky service, which had a 19.1 percent share, Au's EZweb service, which had a 16.2 percent share, and Tu-Ka's EZweb service, which had a 2.9 percent market share.

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