How Award-Winning Telco KDDI Digital Life Achieves Ground-Breaking NPS with povo2.0

Japan’s robust market, digitally elevated

Japan’s telecommunications sector presents a picture of stability, valued at $119.8 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of more than 4% between 2021-2026.1

1. “NTT, KDDI, and SoftBank among leading operators in Japan telecom market | GlobalData Plc,” GlobalData Plc

125 million

Home to over 125 million people, Japan is witnessing a surge in its technologically proficient workforce, 58.6% of which is below 65 years of age.2

85% and rising

Accompanying this demographic shift is an impressive smartphone penetration rate of 85.3 in 2022, expected to soar to nearly 94% by 2027.3

2. “Japan population distribution in 2021, by age,” GlobalData Plc

3. “Smartphone penetration rate in Japan from 2018 to 2022 with a forecast until 2027,” Statista

A digitally native population

The evolving statistics above point to an emerging cohort of digitally native workers poised to fuel Japan’s tech growth.

A mature, postpaid led market

The robustness of Japan’s telecom market is evident when you consider the nearly 99% share of postpaid mobile connections.4 This strong inclination towards postpaid connections suggests a pool of consumers who generate a higher average revenue per user (ARPU) and exhibit a lower propensity to switch providers.

Competition leads to innovation

As the sector continues to be one of the most advanced and competitive in the world, there is a growing need for mobile operators to keep up with the rapidly evolving 
technological landscape.

4. “Share of pre-paid and post-paid mobile connections in the Asia-Pacific region as of January 2021, by country,” Statista

KDDI Corporation is a leader in the telecommunications industry in Japan

A longstanding and trusted leader in the industry known for high-quality product offerings and services. KDDI has its sights set on digital present and future.

partnered with

to launch povo on a digital telco platform Circles

“People want more control and convenience at their fingertips. Our goal is to offer an outstanding user experience for digital-native customers.”

Toshiro Akiyama

CEO of KDDI Digital Life

Challenges

To ignite change, KDDI Digital Life did the following:

Faced challenges with bold innovation

In 2020, KDDI faced the dual challenges of stringent regulations and new competition. The first was the first calling for lower mobile charges, and the second was the aggressive entry of Rakuten Mobile, a new challenge offering mobile plans at a fraction of the cost charged by the incumbent operators. Armed with this knowledge and change in market dynamic, they knew they had to evolve.

Created differentiated digital experiences

When confronted with intensifying price wars, innovation became essential for differentiation, sustainability, and profitability. KDDI understood the need to innovate, and set its sights on bringing a fresh, truly digital experience to the Japanese consumer.

Paired reliability with strong consumer offerings

Despite its core technology infrastructure’s reliable service, KDDI wanted to explore more robust digital capabilities that would excess customer expectations. “We are always listening to our customers, and updating our offerings to support our customers’ mobile lifestyle was an easy decision” said Toshito Akiyama, CEO of KDDI Digital Life.

Digital natives want more

In a fast moving and saturated market, KDDI understood the need to move fast and to create more personalised, adaptable products for Japan’s digitally native consumers.

“Today’s digital natives want great digital products. So we knew we had to create a great digital brand – one that is bold, innovative, and authentic. People want more control and convenience at their fingertips. Our goal is to offer an outstanding user experience for digital-native customers” added Akiyama.

With Circles, the launch of povo2.0 took just 16 weeks. A first for a digital telco brand in Japan.

Breaking new ground with povo2.0

Completely digital, the Circles solution for KDDI was characterised by three key pillars:

Faster time to market

Our agile methodologies help us rollout features effectively. 
Additionally, we also created a micro-services architecture with open APIs, and support code-free configurations so deployments aren’t tied to engineering capabilities.

Customer-centricity

Empowering customers with an award winning consumer app that offers complete control over usage, we provide swift iterations to stay market competitive.

Best-in-class technology

With a clean slate full stack approach to tech, our Circles (SaaS) platform and built-in data lake continue to allow us to deliver superior operational efficiency and strong customer results seamlessly.

An upgrade from 1.0 to 2.0

Facilitated by consumer feedback and insights, KDDI digital life wanted more ways to engage consumers, so povo2.0 was born. To bring povo2.0 to life, KDDI leveraged Circles to facilitate the swift roll-out of bespoke experiences and services. With the team orchestrating on all fronts, povo2.0 brought new products and features to market in just 16 weeks, a feat compared to the traditionally months-long development cycle, and a first for a digital telco brand in Japan.

“The ability to quickly develop and launch differentiated services with a solution that not only works with the KDDI ecosystem, but also runs independently from the system really empowered KDDI to take a bold leap forward with its first-ever digital telco brand.”

In the challenging journey of digital transformation, the importance of people – their skills, resilience, and innovative spirit – cannot be overstated. “I was truly impressed by the people at Circles and their way of thinking and working” states Akiyama.

He adds, "The implementation process can be tricky. KDDI and Circles come from different cultures, which is typically challenging when having to assemble different business requirements together. However, the dedication of the Circles team impressed me. The Circles team runs side by side with KDDI tirelessly to ensure seamless execution of the project, removing the unnecessary hassle of having to manage multiple vendors. The people at Circles are truly its biggest asset."

povo2.0, KDDI’s first-ever digital telco brand operating on the Circles SaaS platform, was unveiled in Japan in September 2021. This collaboration facilitated the rapid roll-out of personalised products and experiences. The launch of povo2.0 was a pioneering effort, entirely accomplished remotely from Singapore, during the COVID-19 pandemic when international travel was limited – another novel occurrence in Japan's telecommunications history.

Introducing Toppings:

The Freedom of Choice

povo2.0 broke new ground by introducing a “0” JPY base plan, letting subscribers tailor their plans by opting for their preferred “toppings”, such as the DAZN entertainment service.

Committed to the motto of “no more bill shock,” 
povo2.0 gives customers the freedom to choose their own plan. The unique “topping services” feature also enhances flexibility, allowing customers to add on various services based on their individual preferences, available for a one-off fee.

Making its mark as Japan's first 100% 5G digital telco brand, KDDI's povo2.0 has swiftly ascended the ranks to become one of the nation's most cherished digital telco brands.

Award winning KDDI’S povo2.0 achieves an impressive NPS of +30 points

povo2.0's net promoter score (NPS) – a key measure of customer satisfaction – stands impressively at +30 points. As the trend of digitally savvy users switching to povo2.0 continues, the collaboration between Circles and KDDI continues to capture customers with an unrivalled digital experience and personalised services.

“I am delighted to have Circles as our partner. They have the proven knowledge and capabilities to serve digital-native users, offering the simple and agile service experience we were looking for" affirms Toshitake Amamiya, Executive Vice President of KDDI Corporation.

Winning awards

KDDI Digital Life went on to clinch the coveted title of “Telecom Company of the Year” at the Asian Telecom Awards 2022. This prestigious award seeks to honour telecommunication enterprises that have distinguished themselves, skilfully navigating through numerous market obstacles whilst delivering exceptional, award-worthy products and services to their customers.

Building for the long term, not the short term

KDDI’s ambitious pursuit of continuous excellence is echoed in the words of Makoto Takahashi, President and CEO of KDDI, who said, “It's not a short-term initiative. We want to build the initiative, and this will be the weapon, the ammunition for us. We want to increase our internal know-how and build on this.” This mindset underscores the company's long-term vision for future growth and innovation – it’s also one that Circles continues to share and actively support.