A Japanese cellular carrier will use Reston-based Sprint Nextel’s network to target Japanese customers based in the United States.
Sprint Nextel will act as a Mobile Virtual Network Operator for KDDI, selling wireless minutes to the company wholesale, Sprint Nextel spokeswoman Melinda Tiemeyer said Monday. KDDI America has not confirmed when its network will launch; the company did not return phone calls seeking comment Monday.
It is likely KDDI is looking to the U.S. market because of a slowdown in the Japanese cellular market, said Reston-based analyst John Green of BusinessEdge Solutions. With 25 percent of foreign-born U.S. residents hailing from Asian countries, their niche may be large enough to be successful, Green said.
Sprint has similar wholesale arrangements with a number of other networks, such as Disney Mobile, which targets families, and Movida, which targets Hispanic customers, Tiemeyer said. The company has not disclosed how much revenue it has earned from the arrangements, she said, though it had 6.4 million total wholesale subscribers at the end of 2006.
“I think if you’re KDDI, there are a lot of attractive things to make this a sensible arrangement,” Green said. “Sprint has a national footprint and an increasingly reliable network.”
Whether KDDI will succeed depends on what customized services it offers, said Joel Sam, a telecommunications analyst with Lanham-based TelcolQ. He said the company would do well to offer a strong voice over Internet Protocol service and competitive rates to Asia.
“If they really come in with a competitive offering, we believe the telecom market is still wide open for any new players,” Sam said.
Using Sprint allows KDDI to test the U.S. market at a lower cost. It also allows Sprint to see how new technology and service offerings play out in the market before investing in those technologies itself, Green said.
The company should pursue bringing advanced Japanese technologies, such as better phones, to the United States, analysts said.
