Beyond mobile number portability: measuring consumer preferences for service portability in Japan's mobile phone market

Abstract

Japan's mobile phone market has been oligopolized by three incumbents who are seeking vertically integrated business models, which may prevent competitors from using platform layers to provide original services. We conduct two types of conjoint analysis to measure consumer stated preferences and draw two main conclusions from the analyses. First, the average consumer is willing to pay more than JPY 2000 (US $20) to increase mobile service portability. Second, the average consumer's willingness to pay corresponds to JPY 100–200 (US $1–2) per song for securing music download platforms. A dilemma exists in consumer preferences for service portability in Japan's mobile phone market, namely the choice between free mobile service portability and convenient music download platforms.

Keywords:

• mobile phone
• portability
• platform
• conjoint analysis
• mixed logit

JEL Classification:

• L96
• H40

Notes

¹ As an exception, E-mobile, which specializes in data communication services, entered the market in March 2007.

² Few papers have studied the demand for mobile telephone services, particularly for 3G services, as previously pointed out by Taylor (2002, p. 130). See also, Massini (2004) for the diffusion of mobile telephony. Tishler et al. (2001), Kim and Kwon (2003), Iimi (2005), Doganoglu and Grzybowski (2007) and Grajek (2010) investigated consumer preferences for mobile phone services using logit models.

³ For previous research using conjoint analysis, see, e.g. Bryan and Parry (2002), Cuccia and Cellini (2007), Ida et al. (2008), Kim et al. (2005), Lee et al. (2006b), Madden and Simpson (1997) and San Miguel et al. (2000).

⁴ The adoption of Halton draws is an important problem that should be examined further (Halton, 1960). Bhat (2001) found that 100 Halton sequence draws are more efficient than 1000 random draws for simulating an ML model (Train, 2003).

⁵ Note that only the WTP values pertaining to the portability of game applications are negligible.