1. Empirical analysis of factors promoting the Japanese 3G mobile Phone
Telecommunications Policy
電管所 碩一
R 廖美涵
2012/05/17

2. Outline Introduction Previous research Mobile market in Japan
Methodology
Results of estimation & discussion
Conclusion

3. Introduction
The Japanese mobile market has shown remarkable growth in the last decade.
119.5 million 3G subscribers;
1.2 million 2G subscribers (Mar. 2011)
3G diffusion rate: 99%
The usage of data communication has exceeded traditional voice communications.
To analyze factors promoting the 3G mobile phone from the supply and demand sides

4. The development of 3G services
Introduction
Why is there a huge gap between countries in diffusion rates of the 3G mobile?
Countries
3G development
Japan & Korea
more 3G than 2G subscribers
The U.S., the U.K., and Germany
3G penetration rates of less than 30%
The underlying hypothesis is that there have been two stages in the successful diffusion of the Japanese 3G
Technological
The development of 3G services

5. Introduction apply dynamic panel data model for analysis
to introduce network externalities into the analysis
related to the endogeneity of data
provide a solution to the problem by applying Arellano-Bond estimator

6. Previous research Estimating mobile phone diffusion
Empirical studies on the Japanese mobile market
Researchers
methodology
contribution
Iimi (2005)
a nested logit model
to examine the influence of basic 2G services: price elasticity, product differentiation of various carriers, network externalities
Ida and Kuroda (2009)
a mixed logit model
to estimate the demand for mobile phone services in Japan
researchers
methodology
contribution
Ahn and Lee (1999)
to conduct an international modeling of mobile services in 64 countries
a complementary relationship between mobile and fixed phones
Gruber (2001)
non-linear dynamic panel model
analyzing factors promoting mobile phones among 15 EU countries
Madden and Coble-Neal (2004)
dynamic panel data approach
a substitution effect between mobile and fixed phones
Others used geographic factors, income level, socio-cultural attributes,… to explain the mobile penetration rates.

7. Mobile market in Japan
Three major carriers have dominated the market since 1999.
In 2007, EMOBILE entered the market using the W-CDMA technology. At the same time, WiMAX was launched.

8. Mobile market in Japan High speed, high quality connection
Global standardization
Connectivity to the Internet
Utilization of high frequency
It will be examined whether these services actually promote the diffusion of the 3G mobile

9. Methodology The model for the estimation is expressed as follows：
And it is estimated by the methods listed below：
Model 1: Fixed effect model of ordinary panel data analysis
Model 2: Random effect model of ordinary panel data analysis
Model 3: Maximum likelihood estimation
Model 4: Instrumental variables fixed-effects estimation
Model 5: Instrumental variables random-effects estimation
Model 6: Arellano-Bond dynamic panel data estimation

10. Results of estimation & discussion
Didn’t have the positive effect on 3G diffusion

11. Results of estimation & discussion

12. Results of estimation & discussion
The technology itself doesn’t enable the proliferation of the 3G mobile, while the value-added services do.
FeliCa is a popular service, with the increasing No. of stores applying m-payment, a large number of wallet phone subscribers emerged. It can also be said for transportation companies.
In the age of globalization, international roaming services contributed to 3G phone diffusion as well.
Though when 2G was introduced, the mobile phones became the portable musical device, music downloads via mobile phone require larger capacity, only 3G can support it.
Contrarily…
2 in 1 enables users to own two numbers of users of this service amounts to only less than 1% of its total subscribers.
One-Seg is not frequently used as it results in severe battery drain and younger people are less interested in TV programs recently.

13. Results of estimation & discussion
All value-added services are not necessarily equally accepted by mobile users.
The policy is also a significant factor affecting the 3G mobile diffusion, such as COAM and the prior notification system of the mobile communications rates. But not all the policies related to 3G work in promoting 3G mobile phones, like MNP. .

14. Conclusion The diffusion of new services depends on…
how well they meet customer preferences and needs
the economic and business systems in use in the region being developed
next generation network going to be launched…

15. The End