Enokiya, the father of mobile Internet in Japan: How operators can avoid plumbing

One day in October, Enokiya, a head of silver hair, sat peacefully in a building in DoCoMo, Tokyo, recalling the past and pointing the way to the future.

This is a person who once influenced the world's mobile internet industry, more than 10 years ago, the "mode–compatible" model pioneered by him in Japan created a stunning mobile internet market in Japan, creating the first climax of the world's mobile Internet development, and operators became the center of the development of mobile Internet, And thus created the Golden age of operators.

Until Apple's iphone officially entered China, China's mobile internet was thought to be influenced by the Japanese model. China Mobile's "mobile Dream Net" is the result of the deep reference to the Japanese mode–compatible, the former chairman of China Mobile, Mr Wang, even on many occasions will say Japan's operators. And China Mobile over the years to learn the Japanese model digestion, and gradually make it become the world's largest mobile operators.

As we begin this dialogue, the world's mobile internet situation is mutation. Operators of the "walled garden" was quickly broken, the carrier-centric mobile Internet development model was seriously challenged, in the Apple iphone as a proxy for the impact of smartphones, the world's operators all night faced with the risk of being "piped".

I really like to see China's journey to the Sun, the Monkey King thinks he is very cattle, but can not escape the palm of Buddha. "Enokiya said:" Ten years ago the operator is Buddha ancestor, but now Apple is the Buddha ancestor. "And he believes that the future of the mobile Internet is the Buddha ancestor Facebook, Google, Amazon and other internet companies, because they are more than operators, mobile phone manufacturers can grasp and grasp consumers."

Enokiya, who is already retired as senior advisor to DoCoMo, believes that it is inevitable that operators are being piped. But people's mobile phone 24 hours a day, 365 days a year, around the mobile phone business, operators have many opportunities.

Piping cannot be avoided

21st Century: The rise of smartphones in recent years, both in China and Japan, has been a big challenge for the operators ' past business models. What do you think of this phenomenon?

Enokiya: I think there are two main reasons for the current smartphone epidemic: In Japan, after Apple's iphone, people think it's easier to use a mobile phone or a tablet, but the demand may be 50%~60%.

Operators themselves are also an important reason to drive the popularity of smartphones, and they want to make money. Because the voice business has no room for development, so want to win with data business. Operators want to sell smart machines, the purpose is to collect traffic fees. To Japan's business hall, smart phones are cheap, many are terminals 0 yuan, functional mobile phones are expensive. In terms of cost, functional handsets are cheaper, but carriers still choose to push their smartphones because they want to collect the flow fees.

At present, the mobile phone to the smartphone conversion period, but I think the function of mobile phones will not disappear. It could end up with 50% split of smartphones. But the market's control will be shifted from operator to handset maker.

"21st century": Is it a good thing for operators to rely on smartphones to dramatically boost their flow revenue?

Enokiya: Although the flow of the mobile phone to increase, the operator's ARPU (per user average revenue) increased, but operators have a great risk, that is, pipeline.

In the past, Mode–compatible's content was determined by the operator (DoCoMo), and the operator decided what service to provide. But now the contents of smartphones are determined by Apple.

When considering which operators to choose, consumers will mainly consider the speed of communication, communication range, cost factors, in contrast between different operators, so will eventually become a price war. Japan's fixed-line operators now have only 1% to 2% profit margins, and it is possible that future mobile communications will fall to that level.

So the advent of smartphones is a challenge for Japanese operators, though now charging traffic

Fee, but future profit margins will surely fall.

"21st century": Have you created a mode–compatible model that has also been challenged?

Enokiya Kai: mode–compatible era of the beginning of the carrier fee model, from the previous to now are a large part of the income. But now many people use credit cards, will have a certain impact on the charging mode.

Previously there were i-menu on the mode–compatible, which could be charged by that generation. But after the advent of the smart machine, the DoCoMo fee only became one of the payment tools, when the user bought a column of text: can be paid through the operator, that is, its toll channel is only one option.

There is no way to avoid the plumbing of operators.

Multi-business development

"21st century": Faced with the threat of pipeline, how should operators respond?

Enokiya Kai: There is no way to avoid the pipeline, I just said may fall into the price war, the future income will be reduced, so to find ways to make up for the lower income. For example, the income of a fee-charging business can reach 30 billion per year.

Now Apple's iOS and Google's Android system are mainstream, operators can also do their own operating system, such as "DoCoMo OS."

But if the operator succeeds in operating the OS, the topic changes. In fact, even if you make an operating system, you can't avoid plumbing. The operator's job is the flow of business, operators are looking for ways to make up for the reduced revenue. So this part of the business is to make up for lost revenue means, such as JR (Japan Railway Company) did the real estate business, shopping malls and other diversified business.

DoCoMo has done a lot of business outside the communications industry because of the inability to avoid plumbing, so business progresses to other areas. DoCoMo to Mitsui Sumitomo invested 34% of the shares, as well as and Komatsu cooperation and so on. Make money by doing other business and then develop the main industry.

"21st century": What are the advantages of operators entering these new areas? How does its internal organization and structure fit into these new businesses?

Enokiya: I was chatting with the Japanese railroad Company, Jr, who was originally a transporter and cargo. During the 2-hour ride of the Tokyo-Osaka Shinkansen, customers were unable to get off the bus during this period, which meant that the railroad company could earn revenue by selling anything on the train during that time. Mobile phones are similar to trains, people do not leave their phones all the while, in theory, you can sell everything around the phone to make money.

Japanese railroad people told me that the problem of staff education and organizational structure is a headache.

At first, the Japanese railway company 100% of people are doing the railway business, security as the first, so the staff character is relatively conservative, the company is not too will go to recruit character radical person, practice moderation. After entering the company, the education of the staff is also safety first.

But since the Japanese railroad began its retail business, its employees have become a hindrance. It took the Japanese railroad company 10 years to make a big shift, and its employees began to become stronger, adapting to the experience of various businesses outside the railroad's main business, such as selling a variety of goods on trains.

Operators are to do the flow of business, then if you want to do Internet services, also have to go through a long process, the staff's personality, ideas need to have a certain change.

In this regard, DoCoMo to consider, China Mobile should also consider the reserve talent, including treatment and other issues. Finally, the boss's ability problem. If you are only interested in the main business, people who do not talk about other business will not be able to develop new business. Because people do not leave their phones, there are indeed many business opportunities (for operators).

Apples are in danger.

"21st century": China's 3G market has just started, do you think when Chinese operators will begin to face the threat of pipeline?

Enokiya: Now Japan 3G market has been saturated, but because China's 3G permeability is still very low, the Chinese market there is room for development, the Chinese operator's pipeline is still far.

China's operators still have 5 years to grow space, can learn from the Japanese operators in the 2008 business model, can be studied from that perspective, China more opportunities than Japan.

"21st Century": APP store mode dominates the habit of using smart machines, Apple has mastered the mobile internet world's voice, do you think its good days will continue?

Enokiya: In fact, the handset maker such as Apple is also in danger, because on the mobile internet top has Amazon, Google and other internet companies. Consumers do not care what mobile phone manufacturer's cell phone he uses on his mobile phone, or which operator's network he uses, so it has nothing to do with operators, handset manufacturers, and ultimately internet companies have all the user information in hand.

I really like to see China's "Journey to The Sun", the Monkey King thinks he is very cattle, but can not escape the palm of Buddha.

Ten years ago the operator was Buddha, but now Apple is the Buddha. Facebook is very popular now, but I guess it could be Amazon's future.

Industry is most concerned about which side will master the user. In grasping, grasps the consumer's this aspect, the operator's ability is still insufficient. After that, the internet company is Buddha ancestor.

Operators need to be developed in addition to the field of communication, such as gaming. In Japan, there are many application developers doing these businesses, they have a strong, and dominant position. In theory, if SoftBank wants to buy Facebook, it is not not, but Facebook's share price is too high (laughs).