Nokia hopes luck will change in Japan with an MVNO

Posted by Chris Garland Friday, January 30th, 2009

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Nokia is hoping for a drastic turnaround in fortunes in Japan, with the announcement that it is to launch a new MVNO venture, barely two months after it exited the country’s device market.

The fact that Nokia has found itself unable to make headway in Japan’s traditionally very closed wireless market, having long cited difficulties in gaining a foothold in it, would seem to bode ominously for any MVNO.

But the world’s biggest device vendor believes that despite the country’s preference for homegrown technologies, it can successfully attract brand-conscious Japanese consumers, with its high-end ‘Club Vertu’ offering.

Under the new arrangement, Nokia plans to lease network capacity from market leader NTT DoCoMo, a move which could be seen as a ‘do or die’ effort to finally crack Japan.

Nokia will offer a high-end service as a means of increasing its 1% share of the country’s handset market.

Media conglomerate Disney launched its own MVNO in Japan in March 2008 using Japan’s third-largest mobile operator Softbank behind leader NTT DoCoMo and number two player KDDI, aimed primarily at young female subscribers.

Disney’s US MVNO, which used Sprint Nextel’s network, proved less than successful, and was closed last year; before that it discontinued a similar service based on its ESPN sports TV network.

Japanese operators usually strictly control handset design and specifications, though SoftBank and DoCoMo do carry some Nokia devices.

Vertu, Nokia’s independently run handset unit, opened its first boutique store in Japan in December, offering luxury devices, including gold and platinum models with prices ranging from ¥890,000 (US$8,400) to ¥5 million, although it will be no mean feat if this target is achieved.

But given the global economic downturn, which Japan, like all countries, is not immune from, it may be that Nokia’s timing for the launch of its expensive handset MVNO could not have been more ill timed. Nokia’s goal now is to tempt wealthy Japanese consumers into buying its expensive handsets rather than spending their money on other goods. This will be a difficult goal to hit indeed.