In Japan, some 25 percent of average revenue per user (ARPU) is derived from data transmissions, which includes text messages (e-mail). This is much greater than in Europe, where data usage accounts for approximately 15 percent of total mobile consumption. The ARPU in Japan is approximately EUR 50 a month and private users pay 90 percent of all phone bills.

Japanese operators put specific demands on phone content because people choose services, not operators or handset vendors. Those operators who offer the most interesting content win the battle for users. Subscribers often do not know who manufactured their mobile phone because more often than not the only logo on it is that of the operator.

There are many discussions around technology, but in the end, users just want things to work. Content and perception are much more important. Operators are aware of obstacles but tend to overcome them. For example, the small display in mobile phones was first seen as an obstacle to gaming. To compensate, operators added 3D displays and linked the steering in rally games to the phone's vibrator function.

A way of adding value to mobile games is to give away virtual gifts which can be stored in the phone and exchanged for, say, a cup of coffee ? because consumers frequently purchase something else to go with their coffee, the shop enjoys additional business.

About 50 percent of all content is made up of Java games and ring tones; some 75 percent of all content is entertainment-based ? so-called kill-time applications. Only 25 percent of the content constitutes time-saving applications, such as business-oriented or banking services.

FeliCa, an integrated circuit (IC) card developed by Sony that enables e-commerce, is another example of where human behavior and lifestyle are combined in a useful business idea. NTT DoCoMo and KDDI plan to install the card in mobile phones once the concept gains more momentum. A user with FeliCa can, for example, board a train by simply placing the card (phone) over a reader. Users need not even take the card out of their wallets. In the future, the card might also serve as a corporate ID card or for PC login. If a card is stolen, the user needs only call the mobile operator to stop access. About 9 million domestic railway travelers in several Japanese cities are currently using FeliCa, and about 9,000 shops and restaurants are connected to Edy, FeliCa?s prepaid money system by bitWallet Inc.

The hottest thing today in Japan is barcode scanning. Using a mobile camera to scan a barcode on a soda can, for example, a user can automatically obtain the URL to the manufacturer?s website or information on a contest or lottery. There are no limits to how barcodes can be used. For instance, it is currently quite popular to have a barcode on business cards ? after scanning the barcode, the phone asks the user if he or she wants to save the information in the address book. No typing is needed. Likewise, advertisements in Japanese magazines often have a barcode located somewhere in the corner. By scanning it, users can be transferred automatically to the company's home page.

Mobile tune TV, a service for watching TV on mobile phones, was launched this year by Vodafone K.K. The service is still not a major success, primarily because the programs are analog and the quality is lacking, but Japanese mobile operators plan to go forward with the launch of mobile tune Digital TV in 2006. Today, sports programs seem to be the most popular.

It is much more popular to use e-mail via the phone in Japan than to send an SMS. This is because it is impossible to send SMS between unlike operator systems. It is estimated that the average Japanese user sends and receives about 10 e-mail messages per day. Among DoCoMo's 3G users, this figure has risen to 16 to 20 messages per day. Every phone has an e-mail address tied to it. Users are charged by the packet (128 byte); by contrast, the price of sending SMS is constant and does not take into account message length.

NEC, which was the first mobile manufacturer to introduce clamshell models, has had tremendous success with its phones. Today, several other manufacturers also offer clamshell models. In fact, at present nearly 90 percent of all phones sold sport a clamshell design. Most camera phones sold in Japan come with a  1 megapixel camera, but 2 megapixel camera phones have begun to enter the market. The latest phones include the following functions and features: megapixel camera, QVGA display, Java applications, music tone download, messaging picture and movie clip, video communications, short video clip download service, stereophonic sound, music player, and external memory slot.

Population 127 million
Median age 42.3 years

Literacy rate: 99 percent
Unemployment rate in 2003: 5.3 percent
Economic growth in 2003: 5.2 percent

More than 86.6 million mobile phone users
71.149 million fixed-line telephone users (in 2002)

Japan has excellent domestic and international service. Domestically, it enjoys a high level of modern technology and excellent service of every kind.

The telecommunications market in Japan is dominated by Nippon Telegraph and Telephone (NTT), which controls 90 percent of the local call market. NTT is also the leading player in a number of other areas including mobile telecommunications ? through its NTT DoCoMo arm. Notwithstanding, thanks to high-quality 3G services and handsets, the country's number-two carrier, KDDI, has claimed the lead in the rapidly growing market for third-generation (3G) services. At present, KDDI has around 25 percent of the overall mobile phone market. Vodafone is the third-largest player, with a market share of just under 20 percent.

Main sources: Interview with Atsuhiko Ohkita, Ericsson Japan, FeliCa website, Yankee Group report, CIA World Factbook.

By Karin Hanson