Nokia plans MVNO to crack Japan and test new models

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Nokia plans MVNO to crack Japan and test new models

By CAROLINE GABRIEL

Published: 24 November, 2008

READ MORE: Nokia | Japan | MVNO

Japan is often the country to watch in terms of new mobile trends, that will later spread to other territories. So reports that, in Japan, Nokia plans to set up its own MVNO - treading even more heavily on the operators' toes than it already has with its web services strategy - should be seen as a test that could be emulated in Europe and the US, and later in emerging economies.

Nokia's aggressive move into mobile web services with its Ovi portal has caused tension with many of its cellco partners in developed markets, which want to keep control of the new mobile internet value chain by putting their own brand on services such as content download and social networking. Now Nokia is proposing actually launching its own network, putting its brand across the whole mobile spectrum from carrier to device to services.

Reportedly, Nokia plans to partner with NTT DoCoMo to launch an MVNO that will heavily geared to its Ovi services and targeted at the affluent end of the market, also pushing its Vertu line of luxury smartphones, the latest of which is co-branded with Ferrari. According to Kyodo News, this would position Nokia in a sector where DoCoMo is not very strong under its own brand.

As in the US, Nokia has had problems working within the Japanese cellcos' model, because they demand such high levels of input and control over device design. They also have highly controlled and differentiated mobile internet environments, notably DoCoMo's i-Mode, which would not be supported by the Nokia MVNO. In other words, Nokia is unlikely to gain significant market share against the majors, but it will take an early step into Japan's nascent open access trend, with a more open alternative to i-Mode, and it will gain invaluable market understanding of delivering a mobile internet service, in the world's most advanced market. This could then be applied to emerging markets where Nokia could gain far greater presence.

And it does not have much to lose in Japan in terms of cellco relationships. DoCoMo and Softbank do carry some of its phones, but they are heavily focused on their homegrown partners such as Sharp and Fujitsu, which in effect create phones to order for the operators, and heavily geared to the specific expectations of Japanese consumers. Apple has found this culture also to be a barrier to uptake of the iPhone via its Softbank deal, and Nokia has less than 2% of the Japanese market.

So while this is a model that would be high risk for Nokia in its traditional markets, where the cellcos will remain its primary channel for many years, despite the rise of open access. But it could be promising in emerging territories, the key focus of Nokia's web services strategy, where carriers have less sensitivity about their own, largely undeveloped brands, and could welcome a global brand like Nokia to boost usage of their new networks.