Development of the Japanese Broadband Market 5

This time, I will write about the turning around in fortunes of the 050 VoIP which might be useful for telecom careers in other countries. In fact, this new service was offered with the intent to create completely new demands.

As I wrote last time, there are two kinds of VoIP service (0AJ VoIP and 050 VoIP) in Japan because of regulation. However, they had almost the same features in terms of cheap telephone services, so there was cannibalisation between them. (0AJ VoIP had a better position than 050 VoIP.)

In 2007, my company offered a new service called “050 Security Number”, using a platform of 050 VoIP. Before explaining the service, I will clarify the background situation.

In 2003, the Private Information Protection Law came into force in Japan. So, firms came to be conscious of their customers’ information such as names, addresses and telephone numbers. Each individual, also, came to think his/her private information was protected by him/herself as well.

In addition, many people, especially young women, are enjoying online shopping and Internet auctions. On the other hand, there were many problems with online activities where customers’ personal data fell into the wrong hands.

Furthermore, according to our survey, more than 80% of people who used online shopping or Internet auction felt awkward in disclosing their landline or mobile phone numbers to online retailers. We were made aware of a growing demand to conceal “true” telephone numbers when shopping online.

Our new service is that we offer “a virtual 050 VoIP number” to customers and when they are shopping online, they do not use their landline number and mobile phone number, but use this new virtual number, as a contact phone number.

When online retailers (or delivery companies) want to contact their customers for some reasons and dial this virtual number, this service can forward calls to his/her real number, or to a message centre on our network and send an email (a text) to customers when someone leaves messages on the message centre. (This is a receive-only service and has some features which are useful to customers such as blocking unwanted calls.)

In fact, this service was offered with our broadband service, Internet connecting service because we expected an effect of loyalty bundling on page 423 of the text. By the end of last year, we could succeed in getting more than 300 thousand new customers and the subscribers are currently still increasing.

Finally, interestingly, we found that we achieved a very low churn rate of the service’s customers. Our subsequent survey showed the reason; because customers passed on their “virtual number” to many online stores (or delivery companies), they thought that they might receive calls from online stores (or delivery companies). Therefore, they didn’t want to change their service providers.