By MARTIN FACKLER and KEN BELSON September 5, 2005
TOKYO - Yoko Yakushiji's biggest complaint with her Vodafone cellphone was not just the lack of functions, the expensive bills or the poor signal. It was not even the delays in receiving text messages.
What annoyed her most was feeling like a social outcast, cut off from the instantaneous electronic world of Japan's tech-savvy youth. The
21-year-old university student says she often missed friends' calls and messages with invitations to meals, parties and even class assignments.In April, she switched providers -- something she had resisted because she had to change her phone number and phone-based e-mail address.
"My friends used to treat me differently. They'd say things like, 'Oh, you can't reach Yoko. She's got Vodafone,' " said Ms. Yakushiji, a junior in international finance at Meiji Gakuin University in Tokyo. "I just couldn't take it anymore."
Ms. Yakushiji was not the only one, as Vodafone, the world's largest cellphone carrier, is finding out. Service problems, a botched rollout of its third-generation phone network and a skimpy lineup of new handsets have driven away Japanese customers in droves. The exodus has turned into an embarrassing and costly setback for Vodafone -- and one it is now struggling to overcome.
Vodafone, which is based in London and also owns 45 percent of Verizon Wireless in the United States, now must win back customers if it is to revive what was once one of its most profitable units and a cash cow for its global operations. Though the performance of its subsidiary in Japan has shown some signs of improving, it has fallen far behind its two larger rivals here, NTT DoCoMo and KDDI.
Vodafone's woes in Japan are a lesson in how global corporations can stumble if they try to push a sales agenda across many national markets without heeding local quirks. The company admits that its biggest misstep was a decision to focus its lineup in Japan on what it calls "converged handsets" -- mobile phones that Vodafone released in December in 13 countries simultaneously. By offering the same phones to many of its 165 million worldwide subscribers, Vodafone hoped to drive down handset prices.
But the one-size-fits-all approach backfired in Japan. Features that were acceptable in Europe or the United States appeared primitive and clunky in Japan. Consumers here are used to getting new technologies like high-resolution color screens, two-megapixel cameras and full Internet access a year or two before the rest of the world.