Okinawa Cellular Telephone

Basic Information

Stock Code: 9436
Industry: Information and Communications Industry
Category Detail: Telecommunications Services
Prefecture: Okinawa Prefecture
Establishment Year: June 1991
Listing Year: April 1997
Official Website: https://www.au.com/okinawa_cellular/
TSE Information: TSE Information
Yahoo! Finance: Yahoo! Finance
Other Companies: Soracom, San-A, Meek, USS, AIR-U, Zenkoku Hosho, Okinawa Financial Group, SPK, Shin-Etsu Polymer, Credit Saison, Ricoh Lease, Vision, Nippon Tsushin, NTT, KDDI, SoftBank, FiberGate, Okinawa Electric Power, SoftBank Group

Overview

Okinawa Cellular Telephone is a regionally focused mobile communications operator established in 1991, holding a high market share in Okinawa Prefecture and serving as a consolidated subsidiary of KDDI.

Current Situation

Okinawa Cellular Telephone recorded consolidated sales of approximately ¥68 billion and operating profit of approximately ¥14 billion for the fiscal year ended March 2020, boasting over 50% market share in mobile phone services centered on the au brand in Okinawa Prefecture. As a subsidiary of the KDDI Group, it features strong ties to the local economy, offering region-specific discount services and unique discount coupons. It also provides the FTTH service 'au Hikari Chura' and is advancing business diversification across communications services. In recent years, it has entered the plant factory business, contributing to regional agricultural promotion. In March 2022, it terminated 3G services and achieved full 4G LTE coverage. It is engaged in sustainability initiatives, continuing donations and support activities for local communities. Moving forward, it aims to strengthen regionally focused management and improve customer satisfaction through 5G services and new technology introductions.

Trivia

Interesting Facts

Maintains over 50% share of the mobile phone market in Okinawa Prefecture.
Offers unique discount coupon system closely tied to the region.
Diversified into agriculture via Okinawa Cellular Agri & Marche.
Has a region-limited brand mascot called au Shika.
Achieved full 4G LTE transition by completely stopping 3G services in 2022.
The only regional company independently managed within the KDDI Group.
Builds strong partnership relationships with Okinawa's local governments and enterprises.
Highly evaluated for outage responses rooted in the region.
Deploys FTTH service 'au Hikari Chura' exclusively in Okinawa.
Conducts annual donation activities to 10 remote island towns and villages in Okinawa.
Implements customer retention through Okinawa-limited au shop services.
Mobile devices feature logos of both KDDI and Okinawa Cellular.
Significant contributions to the development of Okinawa's communication infrastructure.
Long-term brand penetration through regional news and facility naming rights.
Past market competition with major PHS operator Willcom Okinawa.

Hidden Connections

Leads regional revitalization through joint investment by KDDI and Okinawa business community.
Acquired Okinawa Communication Network Co., Ltd. as subsidiary to strengthen fiber optic lines.
Built Okinawa Prefecture's unique high-speed lines through au Hikari Chura provision.
Invested in plant factory business in Okinawa Prefecture to enter agribusiness.
au Shika character serves as the face of au promotions in the prefecture.
Many directors have backgrounds from KDDI or DDI Group.
Long-term advertising and CM collaborations with Okinawa's TV and radio stations.
Successfully differentiated from other carriers through region-limited discounts and services.

Future Outlook

Growth Drivers

Spread of 5G services and increase in new contracts within the prefecture
Strengthened customer retention through deepened regionally focused services
Expansion of demand for FTTH and home high-speed internet
Promotion of IoT and smart city related services
Growth in corporate communications and solutions market
Creation of new revenue sources through diversification such as plant factory business
Increase in communication service demand accompanying regional economic recovery
Service improvements through KDDI Group's technological innovations
Strengthened support for communication infrastructure in Okinawa's remote islands
Brand strengthening through sustainability management
Expansion of cashless payments and cloud services
Service linkages through regional events and tourism collaborations

Strategic Goals

Strengthen customer services to maintain and expand regional share
Achieve full prefecture-wide 5G network coverage and high-speed performance
Reach 30% non-communications revenue ratio through business diversification
Further expand regional agriculture support business and stabilize revenue
Optimize communication infrastructure for reduced environmental impact
Deepen CSR activities demonstrating sustained contributions to regional society
Accelerate adoption of smart city related solutions
Maintain nationwide-level communication quality including remote islands
Continued promotion of digital transformation
Enhance competitiveness through strengthened collaboration with KDDI Group

Business Segments

Mobile Communications Business

Overview

Mobile communication services and solutions using mobile phones and smartphones.

Competitiveness

Region-specific customer service and reliability of the au brand

Customers

Individual Customers
Corporate Enterprises
Local Governments
Tourism Industry
Small and Medium Enterprises
Educational Institutions

Products

Mobile Phone Subscription Services
Data Communication Services
IoT Solutions
Corporate Mobile Plans

Fixed Communication Services

Overview

Provision of fixed communication services centered on high-speed fiber optic lines in Okinawa Prefecture.

Competitiveness

Robust network infrastructure through collaboration with Okinawa Communication Network

Customers

Households
Small and Medium Enterprises
Large Enterprises

Products

Fiber Optic Lines
Fixed-Line Phone Services
FTTH Services

Regional Agriculture Support Business

Overview

Production and sales of agricultural products using plant factories, along with regional revitalization support.

Competitiveness

Efficient agricultural production utilizing ICT technology

Customers

Local Farmers
Supermarkets
Tourism Industry

Products

Leaf Vegetable Production in Plant Factories
Agricultural Product Sales
Regional Revitalization Services

Corporate Communication Infrastructure

Overview

Provision and construction services for communication infrastructure and equipment for corporate customers.

Competitiveness

Regionally focused support and comfortable communication environment provision

Customers

Commercial Facilities
Tourist Facilities
Medical Institutions
Educational Institutions

Products

Dedicated Network Construction
Wi-Fi Infrastructure Installation
Communication Equipment Sales

IoT and Smart City Related

Overview

Provision of IoT services contributing to regional smart city initiatives.

Competitiveness

Customization capabilities tailored to regional needs

Customers

Local Governments
Enterprises
Public Institutions

Products

IoT Sensor Services
Smart City Related Communications
Data Analysis Services

Media and Advertising Business

Overview

Provision of au brand-related advertising and regional promotions.

Competitiveness

High promotional effectiveness leveraging regional brand power

Customers

Advertising Agencies
Local Enterprises
Event Organizers

Products

Advertising Delivery Services
Promotion Planning
Event Sponsorships

Maintenance and Operations Business

Overview

Maintenance and operation services supporting stable operation of communication infrastructure.

Competitiveness

Rapid local response capabilities

Customers

Communication Equipment Manufacturers
Regional Businesses

Products

Communication Equipment Maintenance
System Operation Management

Competitive Advantage

Strengths

Customer closeness through regionally focused management
Brand power of the KDDI Group
High market share and dominance in Okinawa Prefecture
Abundant track record in communication infrastructure development
Provision of diverse communication services
Strong collaboration with regional economy
Stable financial base
Close cooperation with local companies
Rich device lineup
Robust customer support system
High-quality fiber optic communication services
Stable growth in mobile subscribers
Deployment of diverse discount services
Implementation of regional contribution activities
Introduction of advanced communication technologies

Competitive Advantages

Being the only regionally focused MNO in Okinawa Prefecture
High trust and recognition leveraging the au brand
Differentiation from competitors through FTTH and other infrastructure development
Flexible service deployment tailored to unique regional needs
Stable operations utilizing KDDI's technology and capital
Customer retention through unique discount coupons and services
Social contributions in collaboration with Okinawa's business community
High communication quality and robust outage response system
Revenue diversification including plant factory business
Regionally focused marketing strategy
Abundant device procurement channels and partnerships
Enhanced recognition of region-limited brands
Expansion of corporate communication solutions
Strong trust relationships with regional communities
Technical support and collaboration within the KDDI Group

Threats

Risk of new communication operators entering the market
Potential delays in responding to technological innovations
Intensifying competition among major carriers
Damage to communication infrastructure from natural disasters
Risks from changes in legal regulations
Stagnant subscriber growth due to population decline
Communication outages during disasters
Intensified price competition from rivals
Aging communication equipment issues
Delays in adapting to changes in overseas communication technologies
Difficulty in market expansion due to regional limitations
Burden of large-scale investments in new communication technologies

Innovations

2022: Termination of CDMA 1X WIN service and full LTE transition

Overview: Completed switch to LTE for all communications following the end of 3G services.
Impact: Improved customer satisfaction through enhanced communication quality and speed

2021: Launch of plant factory business 'Chura Shima Berry'

Overview: Operating a plant factory in Nanjo City to start high-quality strawberry cultivation.
Impact: Promotion of regional agriculture and creation of new business revenue sources

2020: Enhanced rollout of FTTH service 'au Hikari Chura'

Overview: Strengthened provision of fiber optic lines in collaboration with Okinawa Communication Network.
Impact: Improved competitiveness in fixed communications market and revenue diversification

2023: Launch of au 5G services in the region

Overview: Started 5G network services in Okinawa Prefecture.
Impact: Promotion of new customer acquisition through high-speed communication environments

2024: Advanced IoT solutions for corporates

Overview: Enhanced IoT services for regional enterprises to cover diverse industries.
Impact: Expansion of corporate customer base and revenue growth

2022: Integration of billing operations with KDDI parent

Overview: Outsourced billing collection to KDDI parent company for efficiency improvements.
Impact: Cost reductions in billing processing and service quality improvements

Sustainability

Support for communication environment improvements in Okinawa's remote islands
Regular donation activities to regional communities
Environmental load reduction and local production for local consumption through plant factories
CO2 reduction targets through improved power usage efficiency
Investments in early restoration of communication infrastructure during disasters