Estimating switching costs involved in changing mobile phone carriers in Japan: Evaluation of lock-in factors related to Japan's SIM card locks

Authors:
Akihiro Nakamura
Affiliations:
Department of Economics Tezukayama University 7-1-1 Tezukayama, Nara, Nara 631-8501, Japan
Venue:
Telecommunications Policy
Year:
2010

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Abstract

This paper employs a web-based conjoint-type questionnaire to examine empirically user preference for a hypothetical Subscriber Identity Module (SIM) unlock situation in Japan's mobile phone market. This paper also analyzes carriers' other marketing strategies to lock in consumers. The empirical analysis in this study reveals the following: over 80% of survey respondents evaluate a highly compatible platform with the SIM unlocked. Approximately 70% of consumers find that the value of discounts on initial payments exceeds the discounts on one-year monthly payments. In addition, conditions set by continuing agreements for mobile carriers and mobile handsets reduce consumer benefit by 35% at the median in the case of SIM unlocking with compatible platforms.