Phone
“A mobile is far handier than a computer for Internet access — I seldom use a PC outside the office,” said Tokyo travel agent Takeshi, 32, who declined to give his surname.
Takeshi and other pornography fans are feeding a surge in demand for movie downloads in Japan, home to the worlds first third-generation wireless network. While profiting from the traffic, Tokyo-based mobile carriers DoCoMo and KDDI Corp. say theyve been forced to impose limits on the heaviest users as the $74 billion network feels the strain.
“When you have unlimited data, youre going to have an issue with capacity — its an issue thats been waiting to happen,” said Windsor Holden, principal analyst at Juniper Research Ltd. “It wouldnt surprise me that it happens in Japan first because theyve had 3G for so much longer.”
Softbank Corp., the third-largest network and the Japanese operator of Apple Inc.s iPhone service, said it is also considering restrictions on users with unlimited data plans.
While telecommunications companies say privacy laws prevent them from seeing what customers download, Japans top two pornography providers, Hokuto and Soft on Demand Co., said sales to mobile phone users are driving revenue growth.
Growing Traffic
“Pornography will eventually open a debate about how carriers should modify their business model as data traffic swells,” said Yusuke Tsunoda, a telecommunications analyst at Tokai Tokyo Securities Co. “It may prompt even tighter access restrictions.”
Japan rolled out so-called third-generation, high-speed mobile services in 2001, two years before the U.S. Now, more than 91 million Japanese surf the Internet by mobile phone, downloading movies, games and music, according to the Tokyo- based Telecommunications Carriers Association. Juniper estimates Internet usage over phones in Japan is three times the level in the U.S.
The problems Japanese carriers face may spread as consumers demand more movies, music and other data-intensive downloads, including growing access to sites with adult content, said U.K.- based Juniper.
Pornography Boom
Global revenue from pornography on mobile devices will more than double to $4.9 billion in the five years to 2013, while music sales will grow by about a third, said Juniper, which provides global research on the telecommunication industry and includes Finlands Nokia Oyj, the worlds largest maker of mobile phones, Apple and Microsoft Corp. among its clients.
Customers have complained about stoppages or slow Web access, mainly around midnight when traffic from “heavy users” spikes, Sakurai said. Japanese carriers spent $74 billion building their networks since 2000, based on data provided by Wireless Intelligence, a London-based researcher.
Japan has more than 1,000 companies producing adult-content movies, generating about 17,000 titles last year, said Tim Smith, whos worked in Japans telecommunications industry since 1999 and is chief executive officer of 3G service company Sairis Group KK.
Big Earner
Smith says the largest Japanese adult content Internet sites have as many as 1,000 new customers a day, each paying as much as 10,000 yen as a sign-up fee.
While music downloads are the “official big earner” in Japanese mobile commerce, more money is made through porn, dating sites and even fortune-telling services, said Smith, whose company has helped run promotions in Japan for Viacom Inc.s Paramount Studios, Toshiba Corp. and MasterCard Inc.
Revenue at Soft On Demands mobile site, which offers free movie samples and DVD sales, surged 40 percent in the year to March 2009 and now totals about 15 million yen a month, said Hirotaka Ishimori, head of the companys online division.
“We see the mobile phone as potentially a huge market,” Ishimori said. “Fixed-rate data plans, faster Internet access and sophisticated handsets are contributing to that growth.” Ishimori estimates total annual sales in Japans pornography market are about 100 billion yen.