Japan Telecoms Market Report 2023-2030: 5G, IoT, Satellite Broadband, and Government Backing Propel Growth

Dublin, Jan. 31, 2024 (GLOBE NEWSWIRE) -- The "Japan Telecoms Industry Report - 2023-2030" report has been added to ResearchAndMarkets.com's offering.

Globally, the telecommunications sector is proving to be a core and essential infrastructure service to national economies, with data infrastructure becoming critical in a connected world and will likely increasingly attract a new class of investors such as large infrastructure funds. The publisher expects the Japanese telecommunications industry to remain steady thanks to the defensiveness nature of the industry, amid the political uncertainties and an uncertain economic outlook due to rising inflation.

The Japanese telecommunications market is the third-largest market in the world by revenue (USD137 billion) with four large fixed and mobile network operators that invested heavily in towers and fibre infrastructure over the past two decades despite an overall market underpinned by low economic and population growth.

Growing mobile phone penetration and high fixed broadband take-up among households will fuel future growth over the next five years.

Following the market expansion over the last 5 years, the publisher forecasts subdued revenue growth growing to 2030, the diminishing impact of declining legacy voice and SMS revenue, Rakuten market entry and population decline.

The strategic and economic competition between Japan and China is at the centre of advanced technology competition and the future of global data and communications. For most developed countries in the region, gaining strategic and economic power depends heavily on having technological ascendancy, especially in data and communications.

CapEx Investments

The Capex from Japanese operators is cyclical with mobile rollout leading to investments in line with the operators' top-line growth. Capex investments peaked in 2021 while all three operators built their respective 5G mobile networks. Capex will continue growing from 2024 through to 2030, as mobile operators invest in 5G. Japan sees 5G as the backbone of a wide range of technological advances including autonomous vehicles, smart cities and Internet of Things. All three mobile operators launched 5G services in March 2020 with Rakuten launching in 2021. The Capex to GDP ratio will decline slighlty during the forecast prior to 2030.

The publisher projects an increase in Capex spend throughout 2024 alone by installing more 5G base stations across all cities, ramping up Japan's 5G rollout nationwide and consolidating its 5G network leadership in terms of subscribers and availability in the country.

Operator Profiles

The Japanese three-player mobile market is a remarkably stable market, however it is about to be rocked by fourth market entrant - Rakuten Mobile - looking to follow the steps of successful new entrants launch such as Free in France and Reliance Jio in India. Rakuten has set an ambitious target of being the first cloud-native mobile network.

Between 2016 and 2022, both NTT lost revenue and EBITDA share to KDDI and Softbank over the last six years, Softbank lost some EBITDA share while cost reduction measures started to flow in 2019 with improving EBITDA and cash flow.

Mobile Subscribers and Revenue

Average annual mobile revenue growth was lower (-0.7%) than mobile service subscription growth (4.1%) during the period 2016-2022, highlighting the structural challenges faced by mobile operators. Declining voice & SMS revenue only partially offset by wireless data monetisation is putting pressure on ARPU, compounded by bundling discounts to stem churn.

IoT connections is a major growth driver for mobile operators, a slowdown in mobile subscription growth will put long term pressure, dialling up competition for the three mobile operators fighting for fewer new customers.

According to our benchmark study of mobile data pricing, Japan had among the biggest cost reductions per GB over the last 3 years, while India has the lowest rate in the world with just a few cents per GB.

The publisher forecasts Rakuten could capture up to 10m subscribers in 3 years by offering lower pricing, e-Commerce bundling and other lifestyle services to its existing 100 million Rakuten customers, while KDDI and to a lesser extent NTT and Softbank already embarked on such journey.

The publisher forecasts 5G mobile subscribers will represent nearly 70% subscribers of all subscriptions by 2030, 6G at 5%, 4G will represent about 25% of all connections while 3G will be shut down by the end of 2026.

Broadband Subscribers - FTTH Push to Gigabit Speeds

After over 20 years of investments in fibre infrastructure, Japan boasts one of the highest FTTH penetration in the world as well as one of the most advanced, consumer broadband products offering speeds up to 10Gbps. However, most people use 100Mbps packages which are mostly bundled with mobile services by the three dominant players, NTT, KDDI and Softbank.

Fixed broadband penetration is forecasted to grow modestly as Japan's investments in full-fibre networks are now reaching maturity with affordable packages and increased broadband household penetration growing towards saturation.

High Penetration of FTTH

Japan boasts one of the highest FTTH penetrations in the world (85%) and offers some of the most advanced consumer broadband products with speeds up to 10Gbps. The majority of users opt for 100Mbps packages, often bundled with mobile services.

Satellite Broadband: Reshaping Connectivity

LEO and GEO Satellites

The satellite broadband sector is another area where Japan is making strides. With detailed comparisons of Low Earth Orbit (LEO) and Geosynchronous Orbit (GEO) satellites, Japan is leveraging these technologies for global coverage and low-latency communication, ideal for real-time application. By 2030, the satellite broadband subscribers in Japan are expected to reach 1 million, with the market growing at an average annual rate of 102%. This growth will be accelerated by the deployment of more LEO constellations, such as Starlink Project Kuiper and OneWeb.

Government Initiatives in Digital Infrastructure

Pioneering Digital Strategies

The Japanese government has been a pioneer in ICT initiatives. Strategies like e-Japan Phase I & II and the i-Japan Strategy 2015 focused on developing high-speed internet access, e-Government, and digital inclusion. These initiatives aimed to bridge the digital divide and foster a citizen-driven digital society.

Thematics - Telecoms Infrastructure/5G/M&A/Infrastructure

Infrastructure funds, pension funds and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure.

Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks.

Our Japan Telecoms Industry Report transactions database analysis highlights the dearth of inbound (domestic) transactions in the Japanese telecommunications services market, with the largest transactions from Softbank entering the mobile market and consolidating its position by acquiring smaller operators. However, in the short to medium term, the mobile telco sector is unlikely to experience corporate activity with Rakuten market entry. Softbank Group is selling down shares of its mobile arm to raise cash and fortify its ailing balance sheet with the group still owning about 40% of its mobile unit.

The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.

Conclusion: Japan's Telecommunication Evolution

As we look towards 2030, Japan's telecommunications sector is poised for dynamic growth. With advancements in 5G, IoT, and satellite broadband, along with supportive government policies, Japan is set to continue its legacy as a leader in the global telecommunications arena.

This report provides analyses of revenue and market forecasts as well as statistics of the Japan telecoms industry including market sizing, 5-year forecasts, market insights, key telecom trends, 5G, digital infrastructure and also features the following:

  • Overall Telecommunications Market by Major Operators
  • Telco Operators Profile, Revenue, and EBITDA Mix
  • Mobile Subscribers & Revenue Market Overview and Forecasts
  • Spectrum Holdings
  • IoT Market Overview
  • Broadband Subscribers & Revenue Market Overview and Forecasts
  • Digital Infrastructure (Fibre, Telecom Towers, Data Centres, Submarine Cables)
  • Telecom Tower Market Analysis and Forecast
  • Thematics/Opportunities relating to 5G, M&A and e-Commerce
  • Telco M&A Transaction Database

Why You Should Buy The Japan Telecoms Industry Report:

  • Benefit from the latest market opportunities
  • Understand the threats to your operations and investments and protect your company against future risks
  • Gain insights on emerging trends supporting, enhancing or disrupting your activities in the market
  • Get a full view of the competitive landscape to assess your market position.
  • Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
  • Target business opportunities and risks in the telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments
  • Assess the activities, strategy and market position of your competitors, partners and clients via the Operators Profiles

The Japan Telecommunications Industry Report, 2023-2030 includes a comprehensive review of the Japanese market dynamics, market sizing, market forecasts, analysis, insights and key trends.

List of Chapters

1 Key Statistics
2 Overall Telecommunications Market, 2016-2030
3 Telecommunications Operators Profile
4 Mobile Market
5 Broadband Market
6 Satellite Internet Connectivity
7 Fixed Telecommunications Infrastructure Investments
8 Japan Telecom Towers Infrastructure Landscape
9 Thematics/Opportunities
10 Telco M&A Transaction Database
11 Methodology

Companies Mentioned

  • Arteria Networks
  • e-Mobile
  • Internet Initiative Japan
  • JCom
  • JTower
  • KDDI
  • NTT
  • NTT Data
  • NTT Docomo
  • Rakuten
  • Softbank
  • Sony-Net
  • Starlink

For more information about this report visit https://www.researchandmarkets.com/r/3hokhd

About ResearchAndMarkets.com
ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.


Contact Data