Business Model of Fibergate

Our business core can be summarized by the following three points.
・ We employ a B2B2C model that wirelessly connects carriers and users, targeting corporations that conduct business with end users.
・ We specialize in niche markets where we can create our very own presence.
・ Our two main revenue models are stock income and flow income.
We focus on the B2B2C model because it does not require large investment, the demand for wireless communication infrastructure for individual users are high, and the market is considerably large.
That is to say our business takes the “broad and shallow” approach.
On the other end of the spectrum are the technologies that connect things (M2M and IoT). These technologies have been expanding rapidly with the recent spread of 5G that has grabbed the world’s attention.
Businesses like these, however, require significant investment and advanced technologies, which limits the scope of service delivery.
These businesses, on the contrary, run “narrow and deep”.
We want to focus on communication services that target people.

Specializing in niche markets is an essential aspect for our company to maximize its strengths.
Many communication carriers have a long history, and this holds true for some of Japan’s leading giants in the communication industry.
As such, a certain level of demand must be secured for telecommunications services – which taken spread across the globe – in order for the industry to generate profits.
On the other hand, in order for companies that haven’t been in the market as long to make themselves known, it is necessary to open up the market with precise yet light footwork and innovative ideas.
The niche market is an area where a company can demonstrate its uniqueness and avoid competition with existing major carriers.
That is to say, we believe that our existence in such a market actually means something.

Stock income and flow income are also two very important concepts to us.
Stock income refers to income generated from client usage fees and from rental of equipment.
Flow income refers to sales pertaining to initial client expenses, such as Wi-Fi installation. In other words, flow income comes from one-time sales, whereas stock income comes from continuous sales.
At the beginning, there is flow income that comes from the client’s need to install Wi-Fi. After that, the client’s usage fees generates stock income.
Given that the accumulation of flow income is the foundation of our business model, new client acquisition is what drives our growth.
If we can stabilize operations by fortifying our management base, we will have created a positive cycle in which management resources can be diverted to the further acquisition of new clients.
As a latecomer and an independent company in this industry, we, unlike other major telecommunications carriers, believe that establishing this positive cycle and expanding rapidly will be key to our business strategy.

Our business is comprised of two segments: the Residence Wi-Fi Sector and the Free Wi-Fi Sector .
While the two differ in terms of the type of clients served, they share one common business model.
It can therefore be said our business structure is relatively simple. It is no exaggeration to say that our previously mentioned revenue model is responsible for the sourcing of added value and foundation of the growth mechanism for our business.

Our strengths and differentiating features lie in product development, price competitiveness and authentication technology.

We provide one-stop services our clients need in order to install Wi-Fi.
From design, installation, maintenance, repair, to trouble-shooting, we ensure convenience to our clients by providing services every step of the way.
Upon gaining understanding of client needs we use that knowledge to further develop our products and services.

Price competitiveness is essential in providing services for general consumers.
As we are a fabless manufacturer, we do our own design and programming in-house, then outsource manufacturing and assembly to other companies.
In other words, it is possible to select outsourced companies with the highest cost performance while retaining our company’s know-how and added value.
Further, while pursuing functionality and convenience, we are able to achieve cost reduction by removing superfluous features.

Finally, the most important element is authentication technology.
As far as Wi-Fi services are concerned, we are proud to be one of the few companies that offer advanced authentication technology.
Not only do we handle client authentication, we also collect and analyze tracking information as well as provide redirect settings.
It is clear that these technologies will become increasingly important in terms of ensuring communication security in the future.
In order to maintain a stable business foundation, we believe that we must be at the forefront of the industry when it comes to authentication technology.

It will require constant effort to further develop on our business style outlined above.
This is because the the market for the “wide and shallow” B2B2C model is huge and it is highly likely that new competitors will enter join the ring down the road.
In addition, if we specialize in niche markets, it will become increasingly difficult for us to create new markets, and we cannot ignore the possibility that our business will become less efficient as a result.
Furthermore, we must be prepared to face continued financial difficulties as business grows ever more reliant on flow income.
We would like to execute measures to maximize the foundations of our business in a timely manner, while keeping an eye on the current situation and market trends without letting success distort our vision.