Japan Telecoms Industry Report 2023-2030 - Japanese Three-player Mobile Market is Set to be Rocked by Fourth Market Entrant - Rakuten Mobile

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Jan 03, 2024, 11:45 ET

DUBLIN, Jan. 3, 2024 /PRNewswire/ -- The "Japan Telecoms Industry Report - 2023-2030" has been added to ResearchAndMarkets.com's offering.

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

Japan Telecoms Industry Report at a Glance

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 slighly during the forecast peior 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 the 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.

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.

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/ecwzi8

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