KDDI’s results demonstrate the challenges of entering new markets such as energy and finance
"KDDI’s moves into finance and energy have been slow to yield results; performance has been better in areas more closely related to telecoms, such as data centres and IoT."
KDDI provides an illustration of the challenges faced by telecoms operators that take a significant role in other sectors. It has employed a logical approach in favourable conditions; it has followed a consistent, long-term strategy and has used a mix of acquisition and internal capability development. It benefits from a (relatively) closed market and a business environment that is supportive of companies entering many verticals (many large Japanese companies are involved in numerous sectors; for example, Toyota and Kyocera are two of KDDI’s biggest shareholders).
KDDI may provide a cautionary tale for other operators. Aspects of the operator’s business that are doing well, such as IoT and other business services, are areas that many of its global peers are pushing. However, it has struggled to have a significant impact in the more radical/innovative areas, such as energy and financial services, where it has been a pioneer. The lesson for most other operators is to stick to services that are connected more closely to telecoms than opt for more adventurous projects.
This article is part of our research into the future of the service provider. The other pieces in this series are on Community Fibre, Digi, Iliad, Norlys, SK Telecom and Vodafone.
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