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Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

Internet Initiative Japan / Equity Bottom-Up

<p>IIJ has fired its salvo in the pricing wars with c. 10-40% reductions in consumer mobile plans although a shift in bundle sizes could minimize the impact as subscribers are upsold. Unsurprisingly, there are no sub 1GB plans since Rakuten is giving that away but the 2GB/¥780 plan is competitive (Rak: 1-3GB for ¥980) whilst IIJ is adding tiers higher than 12GB for the first time. On the aggregate, other businesses including Enterprise Mobile are generating sufficient growth that consumer mobile erosion is unlikely to have a material impact on consolidated numbers. Meanwhile, an impending announcement of mobile wholesale rates for FY20 is meaningful especially if costs are less than expected. </p>

IIJ has fired its salvo in the pricing wars with c. 10-40% reductions in consumer mobile plans although a shift in bundle sizes could minimize the impact as subscribers are upsold. Unsurprisingly, there are no sub 1GB plans since Rakuten is giving that away but the 2GB/¥780 plan is competitive (Rak: 1-3GB for ¥980) whilst IIJ is adding tiers higher than 12GB for the first time. On the aggregate, other businesses including Enterprise Mobile are generating sufficient growth that consumer mobile erosion is unlikely to have a material impact on consolidated numbers. Meanwhile, an impending announcement of mobile wholesale rates for FY20 is meaningful especially if costs are less than expected. 

Internet Initiative Japan - New Pricing Plans Are Competitive and Impact Is Manageable