KDDI Finds New Groove With Non-Telco Services
Mobile operators don't have to wait for 5G and IoT -- there's plenty of growth in 4G, according to KDDI boss Takashi Tanaka.
The Japanese operator has found a fresh groove thanks to its au ID offering, Tanaka said at a keynote at Mobile World Congress Shanghai.
He calls them value-added services, though it's as simple as selling non-telco services to KDDI's customer base.
It's a response to the end of subscriber growth among the three Japanese cellcos. Just about every consumer has a 4G phone, and mobile virtual network operators (MVNOs) are absorbing the new customers. Last year, MVNOs grew subscriber numbers by 28% and the network operators grew theirs just 0.7%.
"5G and IoT are still two or so years away. What should we do for the next two to three years?" Tanaka asks.
But KDDI's bottom line last year grew at a healthy 10%, with average revenue per user up 3.4%. The non-telco services accounted for more than 8% of total revenue and nearly a quarter of the growth.
The KDDI Corp. strategy involves adding digital content subscriptions and services to KDDI's au mobile brand, with point rewards as incentives. The new services include power and gas, insurance, mobile banking and payments through auWallet.
Already 90% of au customers have signed up for new services, with 6% taking up a bank account and 3% signing up for the power service.
"The key is the points reward system, which they can use as cash," Tanaka said.
On top of that the company can work data analytics on the increasingly valuable customer data the news services generate, offering insights across a number of verticals.
"It means that we are not in the mobiles business. Our business has extended from online to offline," Tanaka adds.
"We connect everything to auID to offer a much richer service -- that's our strategy. It also means the possibility that MNOs can grow faster from value-added revenue than telecom revenue."
— Robert Clark, Contributing Editor, special to Light Reading