Wikipedia has a pretty useful list of countries by number of mobile phones in use, which shows that Japan (with around 100 million users) is the No. 7 in the world. The market is largely controlled by mobile carriers NTT Docomo, KDDI au and SoftBank Mobile but seemed big enough to offer enough room for a number of smaller competitors, too.
Yesterday, however, a company called Willcom (one of said smaller players) announced it had to file for bankruptcy. The reason: With just $54 million in capital, Willcom managed to amass a whopping $2.2 billion in liabilities. It’s the biggest bankruptcy ever in Japan’s hyper-competitive mobile industry.
Willcom, best known in Japan as a PHS provider, has continuously lost subscribers to the country’s big three carriers in recent months, which means the bankruptcy didn’t come as a big surprise. The company won a license to provide high-speed wireless web connections in 2007 but didn’t have the money to properly develop the service.
It currently has 4.3 million customers in Japan, while market leader Docomo has 56 million (KDDI au: 31 million, SoftBank: 22 million).
Willcom is 60% owned by American private equity firm Carlyle Group (which paid $330 million back in 2004 for the stake), while Kyocera holds 30% and KDDI holds another 10% of shares. Willcom is now said to be seeking support from the Japanese government, SoftBank and a local private equity firm called Advantage Partners.