The financial figures you are quoting are at variance with reported numbers
for Vodafone K.K. Look at the annual reports
and you will see that the operating profit for 2004 was over 1 billion GBP (
1.04 to be exact), or 200 billion yen or so. Net income, which you have
other numbers for, was 6.14 billion GBP, or about 1.23 trillion yen.
Vodafone K.K. (and before that J-Phone) has posted an operating profit for
every year of it's ownership by Vodafone.
That is really not saying much, as the mobile phone business was, and still
is to some extent, a license to print money. The thing that concerned
investors and analysts, and ulitimately Vodafone Group, was the *decrease in
profitability*, which is far cry from making a loss, but when you take it
out three or five years shows that the company will in future make a
loss. Better to sell now when it still has value. Certainly, revenue and
profit numbers have been poor at Vodafone K.K. That is far different,
however, from making a loss.
As far as brand recognition, I find the data interesting. Do you have a
link? I was talking about brand image, rather than recognition, which is a
different beast, and for which I have seen reasonably recent data (it was in
March or April last year) that suggested that Vodafone does fairly well.
That means that among people who recognise the brand, that various things
about the way people feel about a brand are measured. I haven't seen data
for Softbank, but would guess that in their case recognition *could* work
against them, if the overall brand image were poor enough. (More people
recognise the brand, which means more people have a poor opinion). I
certainly have an extremely poor image of their customer service
(non-existent), their billing (we don't care if you cancelled 10 months ago,
pay up or we'll send in the heavies), and the quality of their products
(their wireless 'Trio' router's signal strength was so bad that it could not
reach 10 metres). As an internet portal and auction site, those things don't
matter very much, but from a mobile phone operator or ISP they are
Look, yes, I have an interest in Vodafone K.K., having worked there, and
know probably better than anyone the failings of that company. But I would
much rather talk about real failings (poor network coverage, inflexible
billing system, slow product cycles that allow competitors to trump them,
misguided content strategies, unhappy retail partners, and a whole lot of
others) than phantom figures that don't mean anything, and are often
On 3/10/06, Philip Sugai <philip_at_iuj.ac.jp> wrote:
> We've done similar research on Network Loyalty in Japan here at IUJ
> (although not posted online, I can send the paper free of charge to
> anyone interested). Fundamentally, churn in Japan is incredibly low,
> with all operators reporting churn rates of less than 2% (DoCoMo below
> 1% in Q4 2004, au at 1.5% and Vodafone around 1.8%).
> For this research, we used a panel of 500 Japanese mobile subscribers
> for 3 months. We asked people's "intentions" to switch (along with a
> number of other variables such as attitudes, subjective norms, etc.) and
> subsequently captured their actual loyalty behaviors post-upgrade. The
> interesting thing that we found was that 39% of respondents "intended"
> to switch providers, but remained loyal (This is typically called
> "spurious loyalty", and is a source of major concern as this is a
> company's population of "at risk" consumers). So while churn numbers
> remain low in Japan today, there is a significant population of
> subscribers who are interested in moving to a new provider if the
> switching costs can be lowered. And since we know that number
> portability is one of the highest "costs" associated with changing
> network operators today, the market should be extremely interesting to
> watch after November of this year.
> Regarding a previous post about Vodafone's profitability, while their
> 2005 net income was high (162 billion yen), their 5-year performance in
> Japan has been anything but smooth. In 2001 their net income was 17.5
> billion yen, in 2002 however they had a net loss of 66 billion yen, they
> recovered in 2003 with net income at 79.5 billion yen, only to have a
> net loss of 100 billion yen in 2004.
> And according to the Nikkei Marketing folks, the Yahoo! brand is one of
> the top 10 consumer brands in Japan, while Vodafone (as well as the
> other mobile network operators) do not score on this list. Will Softbank
> continue with their plans to use the "BB Mobile" name, or will they
> negotiate for the rights to use the Yahoo! brand for their mobile
> services now?
> Paul Lester wrote:
> > I don't now... I just switched to AU and then switched out as fast
> as possible.
> > I didn't like the features of the phone or the network that much. I
> wonder if that
> > research is actually accurate. And my friends using Vodafone do not
> > on changing at all.
> Philip Sugai
> Assistant Professor of Marketing
> International University of Japan
> 777 Kokusai Cho, Minami Uonuma-shi
> Niigata, 949-7277 Japan
> Office Tel/Fax: 81-(0)25-779-1400
> This mail was sent to address nfrengle_at_gmail.com
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Received on Sat Mar 11 16:28:44 2006