plans to expand into the value-added area.

At the same time, the rapid traffic growth as a result of the rapid spread of smartphones has forced each of the three companies to take action for the enhancement of its network; while the total traffic of mobile communications has grown about 2.2 times, according to KDDI, which reveals the traffic shares of the feature phones and the smartphones, the smartphone's traffic share is about 80%. At the same time, each of the three, focusing on the speed-improvement of their mobile communication networks and off-loading of mobile communication traffic, is promoting the development of the network able to absorb the growing smartphones.

A look at the specific actions by the three companies shows the following: each of the three companies has started or enhanced its LTE service, aiming to improve the speed of its mobile communication network, and at the same time, has been promoting the measures for offloading the growing data-traffic, such as opening Wi-Fi spots, which have reached about 360,000 spots as of the end of March 2012 as a total of the three; those actions have resulted in the recent growth in investments in communication infrastructures for the purpose of enhancing the networks.

## (3) Growth of Internet-related Businesses

The spread of smartphones has the potential to drive the growth of Internet-related businesses through the increase in the users' opportunity to purchase goods by the e-commerce-services available on the Internet, or via more frequent use of media services such as social media, e-book or video-subscription.

### a. Growth of Internet-platform businesses

The graphs below, showing the growth rates of major global ICT corporations, suggest the following: platform-service providers have shown high growth and at the same time high profit ratios Concerning Japanese players, those who provide social-game services, although smaller than US players in business-size, show high growth-rates and high profit-ratios comparable to US players; on the other hand, players in the network layer or the terminal layer, except for Apple, continue stable business performance with relatively low growth rates.

### b. Ripple effects to application business — App Economy

Along with the spread of smartphones, application programs (so-called applications) operating on smartphones have rapidly become critical in the mobile-related industries; 38.2 billion copies of applications were downloaded in 2011, and 182.7 billion copies are predicted to be downloaded in 2015 $ ^{4} $ ; such expansion of applications is further driving the spread of smartphones and is expected to lead to the expansion of data-communication via mobile phones, the creation of value-added business areas, the development of new-types of mobile phoneterminal-usages, and at the same time, brand-new business areas in ICT industries.

## (4) Layer-by-layer market size and growth rate of ICT industries

Figure 2-2-1-6, and Figure 2-2-1-7 show the layer-by-layer market size and growth rate of ICT industries in the global market and in Japanese and US market respectively with a focus on the Internet-related industries.

Figure 2-2-1-5 Profitability Comparison of Major Global ICT players

Note: Sizes of balloons are proportional to amounts of sales (in 2011)

Sales growth rate (CAGR, from 2009 to 2011)