2013 Japan - Telecoms, Mobile, Broadband and Forecasts

Publication Overview

Japan is a country leading 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:

  • Key statistics;
  • Market and industry analyses, trends and developments
  • Government policies  and regulations affecting the telecoms industry;
  • Estimates for end-2012 and 2013 for fixed-line and Internet market;
  • Forecasts for broadband, FttX and mobile subscribers up to 2017/2018;
  • Infrastructure development;
  • International submarine fibre optic cables;
  • Major players (fixed, mobile and broadband);
  • Major telecoms operators – profiles, financial results, subscribers, ARPU, business strategy;
  • Internet development and VoIP, IPTV;
  • Mobile voice and data markets, including 3G;
  • Broadband (FttX, DSL, cable modem, WiMAX);
  • Mobile applications including m-banking.

Researcher:- Paul Budde
Current publication date:- March 2013 (19th Edition)

Executive Summary

Telecommunications operators face a coming of age, ramp up initiatives to counter threats by OTT competitors / allies

Japan enters the following decade faced with looming social changes and challenges. Accelerated globalisation sees the increasing influence of emerging countries in the international community and the economy. This is coupled with the global shift to a more sustainable society forcing governments and industry to engage with environmental issues and ensure efficient use of energy and resources.

In its home market, Japan has an aging and decreasing population base that requires the creation of services and social systems for support. The market has also seen a change in values and the behaviour of people wanting quality instead of mass consumption, and a move from ownership to efficient resource use and sharing. Japan’s sophisticated IT infrastructure and high broadband penetration sets the scene for improved productivity, convergence of industries and a more flexible industrial structure.

Japan has assumed a dynamic leadership role in many aspects of global and regional telecommunications. The government has been active in regulating its telecommunication industry to introduce more effective competition. This competitive market is challenged to develop the most effective business structures to achieve commercial success.

A key 2010 government-led initiative is the “New ICT Strategy” which aims to realise a “knowledge/information society” by switching from a society led by government and providers to a society led by citizens (taxpayers and consumers). It focuses on key strategies in the lead up to 2020 to support the sustained growth of Japan. The goals include: improved e-government; high-quality medical services using ICT; a nationwide environment for school education and lifelong learning using ICT; creation of new markets worth approximately ¥70 trillion; universal deployment of the smart grid; using ICT to halve traffic congestion on key roads nationwide; by 2013 to advance intensive R&D in strategic fields (eg. next-generation optic networks, next-generation wireless, cloud computing, smart grid, robotics, 3D video). These initiatives support and drive technological development and advanced infrastructure.

Through this sustained oversight, the government has already led Japan to have 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. With 3G subscribers making up around 97% of all mobile subscribers into 2013, Japan had become the fourth country in the world to introduce LTE. Competition was intensifying in areas such as low pricing, a wide variety of handsets, music, video, e-books, and other content services. Increases are expected in the areas of smart phones and telecommunications modules.

Japan has also developed one of the most advanced broadband environments in the world and is the third largest broadband country in the world after the US and China. Especially noteworthy has been the continued strong uptake of FttH services into 2013 (with a corresponding move away from DSL). In the fixed-line market the expansion of broadband services centred on FttX, is accompanied by an ongoing convergence between fixed-line and mobile communications broadcasting. As a result, competition between services has entered a new phase.

The technical advancements in fixed-line and mobile communications are however not sufficient for the traditional telecommunications operators. The prevalence of content and services driving revenue and profitability means a coming of an age for the telecommunications operators who now, more than ever, need to focus on leveraging their full-service network capabilities and take advantage of the new opportunities in a digital age. 

Market Highlights:

  • Over 97% of Japan’s 130 million mobile subscribers use 3G services after 10 years in operation. Japan became the fourth country in the world to deploy Long-term Evolution (LTE) technology in 2010 with DoCoMo’s competitors to launch their own LTE networks into 2013;
  • Mobile operator eMobile launched its LTE network  in February 2012 and was acquired by Softbank in October 2012;
  • Over 100 million mobile internet subscribers embraced iPhones, smart phones and tablets and drove data usage to new levels as the society continued to move from connecting places, to connecting people and devices;
  • New operator UQ Communications, in which KDDI is the largest shareholder, continued its WiMAX rollout and had over 4 million subscribers going into 2013;
  • FttX continues to make impressive strides taking 65% market share in 2012 and over 23 million subscribers. Japan has established the second largest FttX subscriber base at around 25% of the world market after China at about 435%;
  • Cloud-based services with virtual hosting and online storage started to take hold as companies sought to reduce system-operating costs as the financial downturn continued to depress the economy;
  • Analogue to digital switchover also took place during 2011 except in tsunami affected areas, presenting opportunities for all in the value chain.

Internet, broadband, IP telephony and telecoms statistics for Japan – 2010 - 2013

Sector

2010

2011

2012

2013 (e)

Internet users (million)

94

95

96

97

Internet penetration rate

74%

74%

76%

77%

Broadband subscribers

34

37

39

42

Mobile internet users

95

101

105

108

Fixed-line subscribers

43

39

35

33

Mobile phones

112

120

129

135

(Source: BuddeComm based on various sources)

Table of Contents

  • 1. Key Statistics
    • 1.1 Country Overview
      • 1.1.1 Background
      • 1.1.2 Japan’s Economy
  • 2. Telecommunications Market
    • 2.1 Overview of Japan’s telecom market
    • 2.2 Competition in the market
    • 2.3 Telecommunications market sectors
      • 2.3.1 Fixed-line and mobile phones
      • 2.3.2 Internet and broadband
      • 2.3.3 Internet statistics
  • 3. Regulatory Environment
    • 3.1 Major stages of reform – industry
    • 3.2 Major stages of reform – Broadband
    • 3.3 Major stages of reform – ‘New ICT strategy’
    • 3.4 The MPHPT/MIC
    • 3.5 Radio Regulatory Council
    • 3.6 Telecommunications Council
    • 3.7 Telecommunications Carriers Association
    • 3.8 Japan Internet Providers’ Association (JAIPA)
    • 3.9 Universal Service Fund Obligation
    • 3.10 Policy interventions and outcomes
      • 3.10.1 Government investment in infrastructure
      • 3.10.2 Skill building, education and demand programs
      • 3.10.3 Competition policy
      • 3.10.4 Network non-discrimination
      • 3.10.5 Spectrum policy
  • 4. Fixed Network Market
    • 4.1 Market background
    • 4.2 MYLINE Carrier Selection Service (CSS)
      • 4.2.1 MYLINE calling categories
  • 5. Major Operators
    • 5.1 Operating environment
    • 5.2 Major operators
    • 5.3 NTT Corporation
      • 5.3.1 Company Overview
      • 5.3.2 Financial statistics
      • 5.3.3 Government intervention
      • 5.3.4 Business strategy
      • 5.3.5 International expansion
      • 5.3.6 NTT East and West broadband
    • 5.4 NTT DoCoMo
      • 5.4.1 Company overview
      • 5.4.2 Financial statistics
      • 5.4.3 Capex allocation
      • 5.4.4 ARPU statistics
      • 5.4.5 Operational statistics
      • 5.4.6 Applications
      • 5.4.7 LTE
      • 5.4.8 International investments
    • 5.5 KDDI Corporation
      • 5.5.1 Company Overview
      • 5.5.2 Financial statistics
      • 5.5.3 Operations statistics
      • 5.5.4 Business strategy
    • 5.6 Softbank Corporation
      • 5.6.1 Company overview
      • 5.6.2 Company background
      • 5.6.3 Financial statistics
      • 5.6.4 Operations statistics
    • 5.7 Internet Initiative Japan (IIJ)
      • 5.7.1 Company overview and background
      • 5.7.2 Financial statistics
    • 5.8 Jupiter Telecommunications (J:COM)
      • 5.8.1 Company overview
      • 5.8.2 Company background
      • 5.8.3 Financial statistics
      • 5.8.4 Operations statistics
    • 5.9 eAccess
      • 5.9.1 Company Overview
      • 5.9.2 Company Background
      • 5.9.3 Financial statistics
      • 5.9.4 Operations statistics
      • 5.9.5 Business strategies
    • 5.10 Willcom (DDI Pocket)
    • 5.11 SKY PerfecTV! Communications Inc (Sky Perfect JSAT)
  • 6. Telecommunications Infrastructure
    • 6.1 Overview
    • 6.2 Stimulus package for ICT infrastructure
    • 6.3 International infrastructure
      • 6.3.1 Submarine cables
      • 6.3.2 Satellite
    • 6.4 Other infrastructure development
      • 6.4.1 Data centres
      • 6.4.2 Cloud computing
      • 6.4.3 High-speed fibre
      • 6.4.4 Smart grid
      • 6.4.5 Earthquake damage: March 2011
      • 6.4.6 Smart city project for Tsunami-effected cities in Japan
      • 6.4.7 Solar power projects
      • 6.4.8 Internet exchange points
  • 7. Broadband Market
    • 7.1 Background
    • 7.2 Overview
    • 7.3 Broadband statistics
      • 7.3.1 Aggregate broadband subscribers
      • 7.3.2 Broadband subscribers by access type
    • 7.4 Electric power utilities
    • 7.5 Broadband policy
      • 7.5.1 Overview
      • 7.5.2 Regulatory framework
      • 7.5.3 U-Japan
      • 7.5.4 New IT reform strategy
      • 7.5.5 Next Generation Broadband strategy FY 2010
      • 7.5.6 Japan’s New Generation Network
    • 7.6 Broadband Technologies
      • 7.6.1 Overview
      • 7.6.2 Broadband charges into 2012
      • 7.6.3 Cable modems
      • 7.6.4 Digital Subscriber Line (DSL)
      • 7.6.5 Fibre-to-the-Home (FttH)
      • 7.6.6 World Interoperability for Microwave Access (WiMAX)
      • 7.6.7 Broadband Internet via satellite
    • 7.7 Voice over Internet Protocol (VoIP)
      • 7.7.1 Background
      • 7.7.2 Statistics
    • 7.8 Internet Protocol TV (IPTV)
      • 7.8.1 Hulu
      • 7.8.2 Softbank acquisitions
    • 7.9 Broadband Survey results
      • 7.9.1 2008
      • 7.9.2 2009
      • 7.9.3 2010
  • 8. Digital Media / Digital Economy
    • 8.1 Television in Japan
      • 8.1.1 Overview and statistics
      • 8.1.2 Digital TV
      • 8.1.3 Cable TV (CATV)
      • 8.1.4 Satellite TV
    • 8.2 E-government
      • 8.2.1 Overview
      • 8.2.2 Comprehensive government decisions on e-government
      • 8.2.3 Promotion of online use of administrative procedures
      • 8.2.4 Promotion of electronic provision of government information
      • 8.2.5 Promotion of activities to publicise and disseminate e-government
      • 8.2.6 Promotion of optimisation of work and systems
      • 8.2.7 Improvement of government procurement related to information systems
      • 8.2.8 Promotion of information security measures
      • 8.2.9 Promotion of local e-governments
      • 8.2.10 Status 2010
  • 9. Mobile Communications
    • 9.1 Mobile communications market
      • 9.1.1 Background
      • 9.1.2 Mobile statistics
      • 9.1.3 Market status 2012
      • 9.1.4 Differentiation efforts
    • 9.2 Mobile technologies
      • 9.2.1 PDC
      • 9.2.2 CDMA
      • 9.2.3 PHS
      • 9.2.4 Third Generation (3G) mobile
      • 9.2.5 LTE (Long-Term Evolution)/4G
      • 9.2.6 LTE-Advanced
    • 9.3 Mobile handset market
      • 9.3.1 Smartphone adoption
      • 9.3.2 Unlocked handsets
      • 9.3.3 iPhone
      • 9.3.4 Android
      • 9.3.5 iPads
      • 9.3.6 E-Readers
      • 9.3.7 Tablets
    • 9.4 Major mobile operators
      • 9.4.1 Overview
      • 9.4.2 Statistics
    • 9.5 Mobile Virtual Network Operators (MVNO)
    • 9.6 Mobile services
      • 9.6.1 Market background
      • 9.6.2 Prepaid cards
      • 9.6.3 SMS
      • 9.6.4 Wi-Fi
      • 9.6.5 Mobile Internet
    • 9.7 Mobile content
      • 9.7.1 Operators extend video, gaming services to competitor’s networks
      • 9.7.2 Global Positioning System (GPS)
      • 9.7.3 Mobile payment
      • 9.7.4 Mobile banking
      • 9.7.5 Mobile contactless payment (NFC)
      • 9.7.6 Mobile advertising
      • 9.7.7 Mobile TV and radio
      • 9.7.8 Mobile ringtone and music downloads
      • 9.7.9 Mobile social gaming
      • 9.7.10 M2M
    • 9.8 Mobile applications
      • 9.8.1 Earthquake alerts
      • 9.8.2 Personal trainer
      • 9.8.3 QR code readers
      • 9.8.4 Environmental sensors
  • 10. Forecasts
    • 10.1 Forecast Fixed line subscribers – 2013 - 2014; 2018
    • 10.2 Forecast: Mobile subscribers 2012-2018
      • 10.2.1 Forecast: Total mobile subscribers 2012-2018
    • 10.3 Forecast broadband subscribers: 2012-2013; 2017
    • 10.4 Forecast FttX subscribers: 2012-2013; 2017
    • Table 1 – Country statistics Japan – 2013
    • Table 2 – Telecom revenue and investment statistics – 2012
    • Table 3 – Telephone network statistics – December 2012
    • Table 4 – Internet user statistics – March 2012
    • Table 5 – Broadband statistics – December 2012
    • Table 6 – Mobile statistics – December 2012
    • Table 7 – National telecommunications authorities
    • Table 8 – Percentage share of global GDP – 1991; 2014
    • Table 9 – Telecoms service revenue – 1985; 1989; 1993; 1997; 2001; 2006 - 2011
    • Table 10 – Number of competitive telecommunications carriers: 1985; 1989; 1993; 1997; 2001; 2005 - 2012
    • Table 11 – Number of telecommunications carriers in Japan – September 2012
    • Table 12 – Subscribers and penetration: fixed-line versus mobile – 1993 - 2014
    • Table 13 – Fixed-line subscribers by technology – 1997 - 2012
    • Table 14 – Broadband subscribers and population penetration – 2005 - 2012
    • Table 15 – Carrier share of broadband subscribers – 2005 - 2010
    • Table 16 – Internet users, growth and penetration rate – 1998 - 2012
    • Table 17 – Broadband household connectivity and service availability – 2006 - 2008; 2011
    • Table 18 – MYLINE subscribers – 2002 - 2013
    • Table 19 – MYLINE operator market share – February 2012
    • Table 20 – Internet, broadband, IP telephony and telecoms statistics for Japan – 2005 - 2012
    • Table 21 – NTT major shareholders – March 2012
    • Table 22 – NTT financial data – 2000 – 2013
    • Table 23 – NTT proportion of operating revenue by segment – 2001 – 2011
    • Table 24 – NTT forecast consolidated revenue composition – 2008 - 2013
    • Table 25 – NTT subscribers by service – December 2012
    • Table 26 – NTT Broadband subscribers and market share by segment – 2004 – 2013
    • Table 27 – NTT video service subscribers – 2009 - 2013
    • Table 28 – NTT DoCoMo major shareholders – March 2012
    • Table 29 – NTT DoCoMo revenue, net income, capex and EBITDA – 2005 – 2013
    • Table 30 – NTT DoCoMo CAPEX breakdown – 2007 – 2013
    • Table 31 – NTT DoCoMo subscribers – December 2012
    • Table 32 – NTT DoCoMo ARPU, MOU and Churn – 2004 - 2013
    • Table 33 – NTT DoCoMo aggregate ARPU, mova and FOMA – 2005 - 2012
    • Table 34 – NTT DoCoMo’s subscribers by technology and ARPU – 2002 - 2013
    • Table 35 – NTT DoCoMo ID payment terminals and DCMX members – 2007 - 2012
    • Table 36 – NTT DoCoMo infrastructure deployments: technology and speed – 2006 - 2011
    • Table 37 – KDDI financial data – 2001 - 2013
    • Table 38 – KDDI proportion of revenue by segment – 2001 - 2012
    • Table 39 – KDDI total capital expenditure on mobile and fixed line – 2005 - 2013
    • Table 40 – au subscribers by technology and market share – 1997 – 2013
    • Table 41 – KDDI au ARPU, MOU and churn – 2001 – 2013
    • Table 42 – TU-KA subscribers and market share – 1997 – 2009
    • Table 43 – ADSL and FttH subscribers – 2005 – 2013
    • Table 44 – Fixed access lines – 2008 – 2013
    • Table 45 – Softbank major shareholders – March 2012
    • Table 46 – Softbank distribution of ownership among shareholders – March 2012
    • Table 47 – Softbank financial data – 1995 – 2012
    • Table 48 – Softbank proportion of revenue by segment – 2006 – 2012
    • Table 49 – Softbank mobile ARPU and churn – 2004 - 2012
    • Table 50 – Softbank operational data – thousands of subscribers – 2006 - 2012
    • Table 51 – IIJ revenue and net income – 2006 - 2013
    • Table 52 – J:COM financial data – 2003 – 2012
    • Table 53 – J-COM subscribers by service and monthly ARPU – 2000 – 2012
    • Table 54 – J-COM households by service bundling – 2003 - 2012
    • Table 55 – eAccess stakeholders – September 2011
    • Table 56 – eAccess financial data – 2004 – 2013
    • Table 57 – eAccess subscribers, ARPU, churn and acquisition cost – 2008 – 2013
    • Table 58 – eMobile subscribers, ARPU, churn and acquisition cost – 2007 – 2013
    • Table 59 – SKY Perfect JSAT Corporation individual subscribers – 1997 - 2012
    • Table 60 – International internet bandwidth – 1995 - 2010
    • Table 61 – Selected cloud computing investments in Asia
    • Table 62 – Cloud computing services market in Japan forecasts – 2010 - 2015
    • Table 63 – Broadband subscribers and households – September 2012
    • Table 64 – Broadband subscribers and market share by access type – September 2012
    • Table 65 – Broadband subscribers by access type – 1998 – 2013
    • Table 66 – Broadband subscriber annual change and market share by access type – 2001 - 2012
    • Table 67 – Broadband internet access from the home by technology type – 1998 – 2013
    • Table 68 – Broadband household connectivity and service availability – 2006 - 2008; 2011
    • Table 69 – Tariffs for broadband services – 2008
    • Table 70 – DSL subscribers and market share by operator – June 2012
    • Table 71 – FttH subscribers and market share by operator – June 2012
    • Table 72 – Change in ARPU from FttH – 2005 - 2010
    • Table 73 – WiMAX subscribers (BWA) - UQ Communications: 2009 - 2012
    • Table 74 – VoIP subscribers and annual change – 2004 - 2012
    • Table 75 – VoIP subscribers and market share by operator – June 2012
    • Table 76 – NTT services and charges – 2009
    • Table 77 – Key television metrics in Japan – 2012
    • Table 78 – Japan TV industry revenue – 2003 - 2012
    • Table 79 – Japan take-up of DTV by platform – 2012
    • Table 80 – Japan pay-TV market share versus free-to-view TV – 2003; 2008; 2010; 2012
    • Table 81 – Cable TV operators, subscribers and household penetration – 1999 - 2011
    • Table 82 – Satellite broadcasters and BS and CS subscribers – 1999 - 2011
    • Table 83 – Mobile subscriber, annual change and penetration rate – 1995 - 2014
    • Table 84 – Market share of mobile operators in Japan – December 2012
    • Table 85 – Mobile subscribers by system – December 2012
    • Table 86 – Carrier share of mobile telephone and PHS market – 2004 - 2012
    • Table 87 – cdmaOne, CDMA2000 1x and WCDMA subscribers – 1999 - 2012
    • Table 88 – PHS subscribers by carrier – 2004 – 2012
    • Table 89 – PHS subscribers – 1995 – 2012
    • Table 90 – 3G mobile subscribers by operator – December 2012
    • Table 91 – Japan 3G subscribers – 2001 – 2013
    • Table 92 – Japan LTE subscribers – 2010 - 2013
    • Table 93 – NTT DoCoMo LTE roadmap – 2011 – 2013; 2015
    • Table 94 – Number of handsets sold – 2006 - 2010
    • Table 95 – Google and Apple Smartphone platform audience in Japan – 2010 - 2012
    • Table 96 – Mobile subscribers, ARPU and churn by operator – 2004 - 2012
    • Table 97 – Net addition share by operator – 2006 - 2011
    • Table 98 – MVNO subscribers – 2009 - 2012
    • Table 99 – Prepaid mobile subscribers – December 2010
    • Table 100 – Mobile Internet subscribers, services and technology by provider – December 2012
    • Table 101 Mobile Internet subscribers by providers – 2004 - 2012
    • Table 102 – Mobile Internet subscribers – 2000 – 2012
    • Table 103 – Forecast fixed line subscribers and penetration - lower band: 2013-2014; 2018
    • Table 104 – Forecast fixed line subscribers and penetration - higher band: 2013-2014; 2018
    • Table 105 – Forecast mobile subscribers and penetration lower band forecast – 2013 - 2014; 2018
    • Table 106 – Forecast mobile subscribers and penetration higher band forecast – 2013 - 2014; 2018
    • Table 107 – Forecast broadband subscribers and penetration – lower band: 2012-2013; 2017
    • Table 108 – Forecast broadband subscribers and penetration – higher band: 2012-2013; 2017
    • Table 109 – Forecast FttX subscribers and penetration - lower band: 2012-2013; 2017
    • Table 110 – Forecast FttX subscribers and penetration - higher band: 2012-2012; 2017
    • Chart 1 – Japan fixed-line and mobile subscribers – 1993 - 2014
    • Chart 2 – Internet penetration rate of key countries – June 2012
    • Chart 3 – NTT Group revenue, capex, ARPU – 2003 – 2012
    • Chart 4 – KDDI revenue, capex, ARPU – 2004 - 2013
    • Chart 5 – Softbank revenue, capex, ARPU – 2005 – 2012
    • Chart 6 – International bandwidth – 2005 - 2010
    • Chart 7 – Japan broadband subscribers and population penetration – 2000 - 2013
    • Chart 8 – Japan cable modem subscribers and population penetration – 1998 - 2013
    • Chart 9 – Japan DSL subscribers and population penetration – 1999 - 2013
    • Chart 10 – Japan FttX subscribers and population penetration – 2002 - 2013
    • Chart 11 – Japan mobile subscriber growth and population penetration – 1995 - 2014
    • Chart 12 – Japan 2G, 3G and LTE growth – 2000 - 2013
    • Exhibit 1 – Map of Japan
    • Exhibit 2 – Major members of MYLINE Carriers Association – February 2012
    • Exhibit 3 – Significant telecoms operators in Japan
    • Exhibit 4 – NTT Group structure – March 2011
    • Exhibit 5 – NTT DoCoMo investment in international operators – March 2012
    • Exhibit 6 – Softbank operations
    • Exhibit 7 – Major global/regional submarine cables with landing point in Japan - 2010
    • Exhibit 8 – Differences between NXGN and NWGN
    • Exhibit 9 – Representative charges per service in Tokyo – 2008
    • Exhibit 10 – NTT IPTV services and features – 2009 - 2010
    • Exhibit 11 – Long-term evolution (LTE) roadmap in Japan – 2008 - 2012

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