Japan’s Masayoshi Son lost more money than anyone in history. But he may earn some of it back by solving the last-mile problem, according to Forbes.
Thanks to Yahoo BB Japan, his 18-month-old broadband service is on the verge of passing the U.S. in the fraction of households with a high-speed Internet connection.
Yahoo BB owns 32% of Japan’s broadband business. It provides 2 million subscribers with $33 per month broadband service (against a typical cost in the U.S. of $55). New ones are signing up at a rate of 250,000 per month. Son is seriously threatening the financial foundations of the Nippon Telephone & Telegraph network, Japan’s once seemingly unassailable monopoly. To top it all off, Son claims he is breaking even in a business that loses money. On Alexa’s top 500 chart Yahoo.co.jp is #7, still behind South Korea’s Daum.net (#2) and Yahoo.com (#1). I don’t know if Alexa gives a true indication of world popularity but it’s probably indicitive of something. Another way to search popularity is to type “http://” into Google. That gives another ranking.
On the world stage, Japan’s broadband penetration is nothing. South Korea has about 60% of its citizens on broadband right now. They control 4.8% of Asia-Pacific’s total e-commerce revenue. Other Asian countries are close behind. In many instances, they get DSL access that’s 10 to 20 times as fast as that in the U.S. — for as little as $20 a month. In Europe, Germany has 39 percent and Sweden 33 percent broadband penetration. The United States with 15% broadband penetration is not a super power. It’s not even a player.
Son bet $1.3 billion, leasing a chunk of dark fiber from NTT and others and attached it to high-speed digital subscriber line switch gear. While other broadband companies offer nothing but fast Internet connections, Son offers Net-based voice service, hundreds of television channels and video on demand, with plans for more features yet to be unveiled.
The United States is a virgin, 3rd world market. T-Mobile’s $29.95 unlimited local service (500MB/month) is about as good as it gets (unless you’re in a “free” zone). But soon, Xchanges with tunable lasers that are OIF compliant may make 10GigE distribution affordable. Wireless, using 802.16a, could deliver the last mile from cell towers. A Vivato-esq switch might deliver 10-20 Mbps, voice, video and data to a $150 Intel/Pace IP400 settop - for what - $30 to $60/month?
A $19.95 starter package might include Univision and other mainstream entertainment networks as well as voice ($7.95/mo) and high speed data ($17.95/mo). Store broadcast-quality home videos on the server. And get all the VOD you want ($3.99).
The break-even point for video services carried over newly deployed broadband networks could be less than two years.
One word: Noanet.
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