Publication Overview
Japan is a leading country in technology use. The report covers trends and developments in telecommunications, mobile, Internet, broadband, digital TV and converging media including VoIP and IPTV developments. Subjects include:
· Market and industry analyses, trends and developments;
· Broadband and mobile subscriber forecasts up to 2020;
· Facts, figures and statistics;
· Industry and regulatory issues;
· Infrastructure;
· Major players, revenues, subscribers, ARPU;
· Internet, VoIP, IPTV;
· Mobile voice and data markets;
· Broadband (FttH, DSL, cable TV, wireless);
· Convergence and digital media.
Researcher:- Lisa Hulme-Jones
Current publication date:- February 2010 (16th Edition)
Next publication date:- February 2011
Executive Summary
Japan’s telecommunications sector is one of the most active markets in the world. Coming into 2010, the country was undergoing strong competition among the mobile operators in the 3G segment of the market which now comprises 95% of the total mobile market. Heavy discounts and aggressive promotions, as well as the introduction of new methods of handset repayments in instalments, are responsible for the growth occurring across Japan’s already mature mobile sector. This, combined with operators shutting down their 2G networks in the next few years and the acquisition of mobile content, is propelling the robust growth being experienced in the 3G market. ARPU has continued to decline but this is expected to turn around by 2011 to show growth as more non-voice data makes it way to the market.
Japan is one of the world’s leading mobile telephone markets, not only in terms of size but also in terms of innovation and its ability to be early with the introduction of advanced technologies. The market is characterised by intense competition and as user needs become varied, it becomes more difficult for any one carrier to hold on to a majority of market share. Japan has concrete plans to start implementing commercial operations of Long-term Evolution starting in 2010 by NTT and other operators following suit up to 2012.
The affordability of mobile services, and customers looking to cut down outgoings, even though Japan has emerged out of a recession, has damaged the fixed-line market. The number of available lines has continued to decline. It is not only the affordability of mobile services that has damaged the fixed-line market, so too have VoIP services.
Entering 2010, Japan had over 30 million broadband lines in place, making it the third largest broadband country in the world after the US and China. Much of the success of broadband in Japan is owed to the stunning growth surge that occurred back in 2003 on the back of DSL broadband technology. Today Fibre-to-the-Home comprises around 50% of the total broadband market. Japan has also been an early adopter of triple play models which provide TV, broadband Internet and voice telephony as packaged services from a single provider. E-services are continuing to gain ground as a driver of convergence in the Japanese telecommunications market.
The telecommunications regulatory authorities in Japan have been very active in shaping the industry in this country. As a result of their efforts, Japan has assumed a dynamic leadership role in many aspects of global and regional telecommunications. In addition the country has made big strides in developing digital and mobile broadcasting.
Although Japan emerged from a recession during 2009, it is anticipated that it faces a long and bumpy recovery in 2010. The new DPJ government is unlikely to enact major reforms and it is expected that the new government will struggle to get to grips with the country’s structural problems.
Key highlights:
· The number of broadband lines in Japan has posted dramatic growth to over 31 million by end 2009. In terms of quality and affordability, Japan’s telecommunications infrastructure is significantly ahead of those in the US and Europe. Going into 2010, DSL subscribers were still declining from the peak in 2006, as customers continued to shift to FttH. Subscribers of FttH had reached over 15 million by mid-2009;
· Entering 2010, the number of fixed subscribers had declined even further to 41 million (less than 35% penetration), and that of mobile subscribers surpassed 110 million (more than 85% penetration). The trend highlights the severe pressure on NTT, faced with declining fixed-line subscribers and high levels of competition eating away at their market dominance;
· New mobile operator eMobile continued its network expansion and going into 2010 had reached over 1.2 million subscribers which the operator plans to increase to 2.5 million by mid-2010. The company launched the country’s first commercial HSPA+ network across six cities in 2009, offering download speeds of 21.6Mb/s;
· The strong uptake of 3G continued, with over 105 million subscribers going into 2010, representing 95% of all mobile subscribers. DoCoMo is one of the strongest drivers of the Long-term evolution standard, and plans to launch commercial operations in late 2010;
· The local market’s other significant growth area coming into 2010 was in the IP-based telephony reaching over 20 million subscribers. Here Softbank is a major player, with 21% of the total VoIP subscriber base. The various divisions of NTT, as well as KDDI, are also playing a big role in this rapidly expanding market segment, with NTT showing considerable increases to over 50% of market share;
· Popular Value-Added Service continued to be i-mode for Internet access via mobile phones, music downloads facilitated by linkage between the content providers and the operators, and Osaifu-Keitai which is a mobile wallet allowing subscribers to pay for train tickets and the like with their mobile phones. Japan had over 92 million wireless Internet subscribers going into 2010;
· Softbank Telecom conceded to become a reseller of NTT’s Hikari branded services on a national scale. From July 2009, the operator has been selling Hikari services after announcing that it could not keep up with payment of higher leasing fees;
· NTT Com acquired Pacific Crossing, which operates the Pacific Crossing-1 trans-Pacific network, in May 2009. The 21,000km long cable has a capacity for speeds of 1Tb/s, for which NTT paid an estimated ¥10 billion (US$104 million), giving it a new trans-Pacific fibre link between Japan and the US;
· NTT launched the TPE submarine cable network, which runs between Southeast Asia and the United States, in December 2009. The TPE now has a capacity of up to 5.12Tb/s, and comprises around 18,000 km of cable. The construction and startup of the Japan-Asia leg was the second phase of construction for TPE. It has been operational since September 2008, interconnecting Mainland China, South Korea, Taiwan and the US;
· UQ Communications, in which KDDI is the largest shareholder, starting commercial operations in July 2009 providing high-speed mobile data communications through its UQ WiMAX service. By early 2010, coverage is expected to include all 18 government-designated major cities nationwide.
Internet, broadband, IP telephony and telecoms statistics for Japan – 2007; 2009
|
Sector
|
2007
|
2009
|
|
Internet
|
|
|
|
Internet users (million)
|
87.5
|
94.0
|
|
Penetration rate
|
68.5%
|
74.0
|
|
Broadband subscribers
|
|
|
|
DSL (million)
|
13.1
|
10.8
|
|
FttH (million)
|
11.3
|
15.9
|
|
Cable Internet (million)
|
3.8
|
4.2
|
|
Total (million)
|
28.3
|
30.9
|
|
IP Telephony
|
|
|
|
IP telephone users
|
14.5
|
20.5
|
|
Mobile wireless subscribers
|
87.2
|
92.3
|
|
Subscribers to Telecoms Services
|
|
|
|
Subscriber telephones (million)
|
44.0
|
39.5
|
|
Mobile phones (million)
|
100.5
|
111.0
|
|
3G mobile phones (million)
|
83.3
|
105.0
|
(Source: BuddeComm based on Softbank, MIC, TCA)
For those needing high level strategic analysis and objective analysis on Japan, this report is essential reading and gives further information on:
· The government’s adoption of its ‘New IT Reform Strategy’ to promote the installation of broadband, in order to eliminate zero-broadband areas by 2010. Together with the ‘Next-Generation Broadband Strategy 2010’ this is intended to advance the need for nationwide broadband installations;
· The historic election win by Yukio Hatoyama’s Democratic Party of Japan (DPJ) in mid-2009 which broke a deadlock in Japan’s parliament and ended a half-century of almost unbroken rule by the Liberal Democratic Party (LDP);
· Japan’s stimulus package revealed in 2009, putting emphasis on deploying ICT infrastructure and a ‘networked recovery’, ie the notion that ICT infrastructure and its use is a tool to revive the economy through new innovative services and offering solutions to pressing social challenges;
· NTT DoCoMo bringing forward the date for its 2G network shutdown from 2012 to 2011. The overwhelming majority of its subscribers have already migrated to the FOMA 3G platform;
· Japan’s four main mobile operators, NTT DoCoMo, KDDI (au), Softbank Mobile and eMobile – planning to invest up to ¥1 trillion (US$10 billion) into so-called ‘3.9G’ mobile services. From 2010 a number of domestic carriers intend to utilise their existing 3G infrastructure, on which the providers spent ¥ 5 trillion;
· By mid-2009, mobile handset makers Panasonic and Sharp, facing bleak prospects at home and setting their sights on the vast overseas market. As well as having little room to grow in Japan, the market for handsets has been altered radically in the past 18 months by a shift in sales policy of mobile phone service providers, where companies now expect consumers to shoulder the full cost of new mobile phones;
· NTT beating its own target for IPTV subscriber growth to its Hikari TV and FLET’S TV video services over fibre-optic access reaching 630,000 subscribers by early 2009, and planning for nearly 1.5 million customers by early 2010. With mobile video services such as ‘BeeTV’ also showing growth, the company has high hopes for video services going forward;
· NTT taking the plunge towards cloud-based services with its virtual hosting and online storage offerings in Japan in mid-2009. Corporations are beginning to use cloud-based services for the simplified introduction of ICT systems, as well as to reduce system-operating costs and lower the environmental impact of their ICT operations;
· In November 2009 the Google-invested Unity trans-Pacific cable landing in Japan and to be ready for service in Q1 2010. The cable, Google’s first direct investment in telecom bandwidth, is also invested by Asian carriers SingTel, PacNet, Bharti Airtel and KDDI.
Data in this report is the latest available at the time of preparation and may not be for the current year.