Fierce competition in mobile market

Cellphone novels popular among Japanese users

The Big Three mobile communications companies — NTT DoCoMo, Softbank and Au — are fiercely competitive in everything from their subscription packages to their media service offerings.

One such service that has exploded in popularity is the cellphone novel, written on cellphones and posted on specialized sites, where anyone can read them. Most of the authors are amateurs who are about the same age and sex as the majority of readers — women in their 20s and 30s.

Paperback editions of keitai shosetsu, as the novels are called, accounted for five of the top bestselling novels handled by major book wholesaler Tohan in 2007. Several have even been turned into hit pics, including “Sky of Love,” a drama about star-crossed young love that earned $36 million in 2007 — the sixth highest B.O. for a domestic release.

Mobile technology is advancing apace, generating new services. NTT DoCoMo, the industry pioneer and still the leader, together with its two rivals, now offers third-generation, or 3G, handsets that allow users to download video data with the speed of broadband. With NTT DoCoMo’s Home U service for its 3G FOMA handsets, which launched in June, users can connect to their home broadband networks via wireless LANs, giving them access to an unlimited range of video entertainment for $9.35 monthly.

This sort of innovation, as well as cost-cutting, has paid off: NTT DoCoMo’s profits soared 41% in the first quarter of fiscal 2008. Meanwhile, rival Softbank, boosted by industry-leading gains in cellphone subs and cuts in dealer incentives, reported a record operating profit in the same quarter: $773.5 million, compared with $716 million the same period the year before.

Softbank group company Yahoo Japan, which operates the country’s highest-earning Web biz, recorded a 10.5% operating profit gain.

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