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2008 Asia - Telecoms, Mobile and Broadband in Japan

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:

  • Market and industry analyses, trends and developments;
  • 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.


Japan’s telecommunications sector is one of the most active markets in the world. The telecommunications regulatory authorities in Japan have been instrumental in shaping the industry and as a result, Japan has assumed a dynamic leadership role in many aspects of global and regional telecommunications. The control that the incumbent operator, NTT Corp, has continued to exert over virtually all local customers remains a particular challenge for the regulator. In addition, a growing concern has been the development (and lack) of cyber law in a society that is increasingly spending its time online.

Japan has been an early adopter of triple play models which provide TV, broadband Internet and voice telephony as packaged services from a single provider. This has been enabled through Japan being a world leader in broadband Internet. Though there is little hope of surpassing the US and China in terms of numbers; the market in Japan remains as eager as ever for broadband connection to the Internet. Japanese broadband subscribers comprised around 8.5% of the world subscriber base going into 2008.

Coming into 2008, the country was witnessing the continued growth of VoIP and triple-play services in particular. Strong competition was also apparent among the mobile operators in the 3G segment of the market. Especially noteworthy has been the uptake of FttH services (with a corresponding move away from DSL) and the big strides taken in developing digital and mobile broadcasting.

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. Japan is one of the world’s top 3G markets, with over 80 million (80%) 3G subscribers by the end of 2007, as well as plans for 4G.

Key Highlights:

  • The number of broadband lines in Japan has posted dramatic growth, more than tripling in size over the four years to March 2007. In terms of quality and affordability, Japan’s telecommunications infrastructure is significantly ahead of those in the US and Europe. Going into 2008, DSL subscribers were declining from the peak in 2006, as customers continued to shift to FttH. The DSL and FttH platforms support the bulk of the country’s broadband market, with other technologies such as cable modem and wireless making up less than 10% of the total market.
  • During 2007, the number of fixed subscribers declined below 50 million (less than 40% penetration), and that of mobile subscribers surpassed 100 million (just less than 80% penetration). This trend highlights the severe pressure that NTT is experiencing, faced with declining fixed-line subscribers, and high levels of competition and low price plans eating away at the mobile market dominance.
  • The local market’s other significant growth area coming into 2008 was in IP based telephony, taking up more than 10% of all telephony subscriptions. Here Softbank is a major player, with 30% of the total VoIP subscriber base by September 2007, although NTT showed considerable increases during 2007 to obtain over 50% market share.
  • 3G accounts for almost 80% of the mobile market in Japan, providing a strong base for the development of richer content. DoCoMo has introduced HSDPA and plans to offer HSUPA in 2008. The company is also one of the strongest drivers of the Long-Term Evolution standard, and is expected to launch around 2009/10 before the standard is complete.
  • NTT DoCoMo became the first mobile operator, in December 2007, to adopt an MIC panel recommendation, to stop subsidising mobile phone prices through rebates. Other operators showed reluctance due to concerns that handset sales could decline, resulting in the possible closure of retail outlets.
  • EMobile launched its 3G service in October 2007 and by end January 2008 the operator had 238,500 subscribers. The plan to offer voice telephony services were, however, put in jeopardy as a result of difficult and protracted negotiations with DoCoMo on a roaming deal.
  • IPMobile was awarded a licence restricted to 2.0GHz bandwidth in November 2005. After investing over US$426 million, in 2007 IPMobile abandoned its plans to enter the mobile market due to financial difficulties. The company returned its 3G mobile licence and filed for bankruptcy with the Tokyo District Court.
  • The Radio Regulatory Council awarded licences to KDDI and PHS operator Willcom in December 2007. KDDI plans to introduce WiMAX in 2009, while Willcom hopes to launch its own high speed service, also in 2009, using next generation PHS technology.
  • Popular valued added services continue 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. Out of NTT DoCoMo’s 53 million subscribers by September 2007, nearly 48 million used the i-mode service and 27 million the mobile wallet, an increase of 100% for the latter over the previous year. Japanese subscribers are well accustomed to accepting rich content advertising messages. Mobile operators establish their own mobile advertising agencies to support operators’ business models for mobile advertisements. By 2012, the total value of all mobile advertising and marketing is expected to reach US$1.2 billion in Japan.
  • In March 2008 US brand Walt Disney launched as an MVNO on Softbank’s network. MVNOs are common outside Japan, though they have had mixed results. Disney last year hung up on an MVNO in the US that used Sprint Nextel Corp’s network, and in 2006 discontinued a similar service based on its ESPN sports TV network.
Internet, broadband, IP telephony and telecoms statistics for Japan - 2004 - 2007
Sector 2004 2005 2006 2007
Internet
Internet users (million) 77.3 79.5 85.3 87.5
Penetration rate 60.6% 62.3% 66.8% 68.5%
Broadband (million subscribers)
DSL 11.2 13.7 14.5 13.48
FttH 1.14 2.90 5.46 10.52
Cable Internet 2.58 2.96 3.31 3.75
Total 14.9 19.5 23.3 27.8
IP Telephony (million)
IP telephone users 5.28 8.31 11.5 14.5
Mobile Wireless subscribers 75.0 80.1 82.6 87.2
Subscribers to Telecoms Services (million)
Subscriber telephones 60.2 59.8 59.4 59.1
Mobile phones 81.9 87.0 91.8 100.5
(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 re-entry of eBay into Japan through an association with Yahoo Japan, after leaving the market in 2002.
  • Continued copyright infringements from the 2007 launched Japanese language site of YouTube, resulting in action by a coalition of Japanese television, music and film companies. YouTube is still more popular than any rival Japanese video sharing sites.
  • Allocations of ¥14-15 billion (US$120-130 million) by The Ministry of Trade, alarmed by the global dominance of Google and other foreign Internet services, for 10 Japanese partnerships to try to gain the lead in new search technologies.
  • The successful launch of an experimental satellite, in early 2008, aimed at providing high-speed Internet access across Asia. The Kizuna satellite will allow super-high speed data communications of up to 1.2Gb/s, making it one of the fastest connections in the world.
  • The start of Japan’s research and development on technology for a new generation of network that would replace the Internet, eyeing to bring the technology into commercial use in 2020.
  • The MIC announcement to set aside spectrum used by TV broadcasters for 4G mobile communication services. The government proposed terminating broadcast use of the 3.4-3.6GHz band by November 2012, with part of the spectrum to be released from January 2010 onwards for mobile services.
Data in this report is the latest available at the time of preparation and may not be for the current year.

1. Key Statistics
2.1 Overview of Japan’s telecom market
2.2 Fixed-line and mobile phones in Japan
2.3 Internet, broadband and wireless Internet in Japan
2.3.1 Japan Internet Providers’ Association (JAIPA)
2.4 Television broadcasting in Japan
2.5 Telecommunications carriers
3. Regulatory Environment
3.1 Major stages of reform
3.2 The MPHPT / MIC
3.3 Telephone numbering plan
3.4 Mobile Number Portability (MNP)
3.5 Interconnection arrangements
3.5.1 Fixed-mobile interconnection
3.6 History of regulatory developments
3.6.1 Telecommunications Business Law of 1985
3.6.2 Years 1992 - 1999
3.6.3 Year 2000
3.6.4 Year 2001
3.6.5 Year 2002
3.6.6 Year 2003
3.6.7 Year 2004
3.6.8 Year 2005
3.6.9 Year 2006
3.6.10 Year 2007
4. Fixed Network Market
4.1 Market overview
4.1.1 Dialing parity
4.1.2 Analysis of Local Loop Unbundling (LLU)
4.2 Domestic services
4.2.1 Planned discontinuation of domestic fixed-line telephony in Japan
4.2.2 Local calls
4.2.3 National long-distance calls
4.2.4 International calls
5. Major Operators
5.1 Operating environment
5.1.1 Regulatory environment
5.2 Overview of major operators
5.2.1 NTT Corporation
5.2.2 KDDI Corporation
5.2.3 Softbank Corporation
6. Telecommunications Infrastructure
6.1 Overview of infrastructure developments in Japan
6.1.1 The push to develop Next Generation Network (NGN) standards
6.1.2 Opening up the last mile
6.2 Regulatory issues
6.2.1 Policy on national information superhighway
6.2.2 Government’s IT Basic Strategy
6.2.3 Government plan for ubiquitous networks
6.3 Major national infrastructure players
6.3.1 Crosswave Communications
6.3.2 KDDI Corp
6.3.3 NTT Corp
6.3.4 Softbank
6.3.5 Tokyo Electric Power (TEPCO) and Kansai Electric Power (KEPCO)
6.3.6 Willcom (formerly DDI Pocket)
6.3.7 Internet Initiative Japan (IIJ)
6.3.8 Jupiter Telecommunications (J:COM)
6.3.9 China Network Communications
6.4 Broadband networks
6.5 Fibre-to-the-Home (FttH)
6.5.1 Market overview
6.5.2 Development patterns
6.5.3 Fibre-to-the-Curb (FttC)
6.6 IPv6
6.7 International submarine cable infrastructure
6.7.1 Overview
6.8 Satellite infrastructure
6.8.1 Overview
6.8.2 Plans for powerful broadband satellite for 2015
6.8.3 Japanese satellite provides Internet access at 1.2Gb/s
6.8.4 Global Multimedia Mobile Satellite Communications (GMMSC)
6.8.5 Inmarsat
6.8.6 Asia Pacific Mobile Telecommunications (APMT)
6.8.7 Japan’s Space Development Plan
6.8.8 Major satellite operators
6.9 Voice over Internet Protocol (VoIP)
6.9.1 Overview
6.9.2 Major VoIP providers
6.9.3 Regulatory environment for IP telephony
7. Broadband Market
7.1 Overview
7.1.1 Mega Consortium / Broadband Consortium Japan (BB Japan)
7.1.2 Impact of broadband on voice market
7.2 Cable modems
7.2.1 Market overview
7.2.2 Regulatory issues
7.3 Digital Subscriber Line (DSL)
7.3.1 Market overview
7.3.2 Major DSL providers
7.4 Fibre-to-the-Home (FttH)
7.4.1 Market overview
7.4.2 Major FttH players
7.5 Broadband over powerline (BPL) / powerline communications (PLC)
7.6 Wireless broadband
7.6.1 Wireless LAN (WLAN)
7.6.2 Major WLAN providers
7.6.3 World Interoperability for Microwave Access (WiMAX)
7.6.4 Voice over WLAN (VoWLAN)
7.6.5 Ultra Wideband (UWB)
7.6.6 Local Multipoint Distribution Service (LMDS)
7.6.7 Broadband Internet via satellite
7.7 Global LAN Ethernet
8. Convergence
8.1 Overview of media convergence
8.2 Triple play models
8.3 Digital TV
8.3.1 Overview
8.3.2 Broadband TV
8.3.3 Cable TV (CATV)
8.3.4 Satellite TV
8.3.5 Digital Terrestrial TV (DTTV)
8.4 E-Services
8.4.1 Overview
8.4.2 E-commerce
8.4.3 E-Cash
8.4.4 E-Banking
8.4.5 Online trading
8.4.6 E-Government
8.4.7 E-Entertainment
9. Mobile Communications
9.1 Overview of Japan’s mobile market
9.1.1 Background
9.1.2 Mobile statistics
9.1.3 Market developments
9.1.4 New entrants into the mobile market
9.1.5 IP mobile telephony to hit the Japanese market around 2008
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 Fourth Generation (4G) mobile
9.2.6 Mobile handset market
9.3 Major mobile operators
9.3.1 Brief company descriptions
9.4 Mobile services
9.4.1 Overview
9.4.2 Mobile Enterprise Alliance Japan
9.5 Mobile voice services
9.5.1 Prepaid cards
9.5.2 Mobile satellite services (MSS)
9.6 Mobile data services
9.6.1 Analysis - mobile data market
9.6.2 Mobile Internet
9.6.3 Short Message Service (SMS)
9.6.4 Multimedia Messaging Service (MMS)
9.6.5 General Packet Radio Service (GPRS)
9.6.6 Push-to-Talk (PTT)
9.6.7 BlackBerry
9.7 Mobile content and applications
9.7.1 Content for mobile market
9.7.2 Global Positioning System (GPS)
9.7.3 M-commerce / m-cash
9.7.4 Mobile gaming
9.7.5 Mobile conferencing
9.7.6 Mobile videoconferencing / mobile video
9.7.7 Mobile TV and radio
9.7.8 Mobile ringtone and music downloads
9.7.9 QR code readers
9.7.10 Mobile books
9.7.11 Mobile Applications
10. Glossary of Abbreviations
Table 1 - Country statistics Japan - 2008
Table 2 - Telecom revenue and investment statistics - 2006
Table 3 - Telephone network statistics - September 2007
Table 4 - Internet user statistics - December 2007
Table 5 - Broadband statistics - September 2007
Table 6 - Mobile statistics - December 2007
Table 7 - National telecommunications authorities
Table 8 - Subscribers and penetration: fixed-line versus mobile - 1993 - 2007
Table 9 - Internet subscribers, cable modem, DSL and FttH - 2002 - 2007
Table 10 - Number of telecommunications carriers in Japan - November 2007
Table 11 - MYLINE subscribers by category - January 2008
Table 12 - Internet, broadband, IP telephony and telecoms statistics for Japan - 2004 - 2007
Table 13 - NTT revenue, net profit, CAPEX and EBITDA - 2000 - 2008
Table 14 - NTT revenue by segment - 2004 - 2007
Table 15 - NTT subscribers and annual change - September 2007
Table 16 - Operating revenue - 2000 - 2007
Table 17 - NTT DoCoMo subscribers - January 2008
Table 18 - NTT DoCoMo operating revenue and annual change - 1996 - 2007
Table 19 - NTT DoCoMo ARPU, MOU, Churn - 2004 - 2007
Table 20 - NTT DoCoMo Investment in International Operators - March 2008
Table 21 - NTT Data revenue and annual change - 1995 - 2008
Table 22 - KDDI revenue and net income - 1996 - 2008
Table 23 - KDDI proportion of revenue by segment - 2001 - 2007
Table 24 - au subscribers by technology and market share - 1997 - 2007
Table 25 - KDDI ARPU, MOU and Churn - 2001 - 2007
Table 26 - TU-KA subscribers and market share - 1997 - 2007
Table 27 - ADSL and FttH subscribers - 2005 - 2008
Table 28 - Softbank revenue and operating profit - 1995 - 2007
Table 29 - Softbank proportion of revenue by segment - 2007
Table 30 - Softbank revenue, EBITDA, CAPEX - 2005 - 2007
Table 31 - Softbank operational data: millions of subscribers - 2005 - 2007
Table 32 - Softbank ARPU, MOU and Churn - 2001 - 2007
Table 33 - VoIP subscriber growth - 2003 - 2007
Table 34 - VoIP subscribers and market share by operator - September 2007
Table 35 - VoIP subscribers by number category - September 2007
Table 36 - Broadband subscriber growth - 2000 - 2007
Table 37 - Broadband subscribers and households - September 2007
Table 38 - Broadband subscribers and annual change by access type - September 2007
Table 39 - Broadband subscribers and market share by access type - September 2007
Table 40 - Cable modem broadband subscribers - 1998 - 2007
Table 41 - DSL broadband subscribers - 1999 - 2007
Table 42 - DSL subscribers and market share by operator - September 2007
Table 43 - Softbank’s broadband capacity and lines in service - 2002 - 2006
Table 44 - FttH broadband subscribers - 2002 - 2007
Table 45 - FttH subscribers and market share by operator - 2007
Table 46 - ‘New type’ WAN - subscribers - 2002 - 2007
Table 47 - ‘New type’ WAN Services Subscriptions - September 2007
Table 48 - FWA subscribers - 2002 - 2007
Table 49 - Softbank and the world’s leading IPTV operators’ subscribers - 2006
Table 50 - Cable TV subscribers - 2002 - 2007
Table 51 - Cable TV operators - 1998 - 2007
Table 52 - J-COM subscribers by service - 2000 - 2008
Table 53 - BS and CS subscribers - 2003 - 2007
Table 54 - Number of satellite broadcasters - 2003 - 2006
Table 55 - SKY PerfecTV! subscribers - 1998 - 2007
Table 56 - Mobile subscribers - 1995 - 2008
Table 57 - Mobile subscribers by system - 2008
Table 58 - cdmaOne subscribers - 1999 - 2008
Table 59 - CDMA2000 1x subscribers - 2002 - 2008
Table 60 - WCDMA subscribers - 2003 - 2008
Table 61 - PHS subscribers by carrier - 2004 - 2008
Table 62 - PHS subscribers - 1995 - 2008
Table 63 - 3G mobile subscribers by operator - January 2008
Table 64 - NTT DoCoMo’s WCDMA subscribers - 2001 - 2008
Table 65 - Mobile operators, technology and subscribers - January 2008
Table 66 - Prepaid mobile subscribers - January 2008
Table 67 - Mobile wireless Internet subscribers by providers - January 2008
Table 68 - Mobile wireless Internet subscriber growth - 2000 - 2008
Exhibit 1 - Major members of MYLINE Carriers Association - January 2008
Exhibit 2 - Significant telecoms operators in Japan
Exhibit 3 - NTT Group structure - January 2008
Exhibit 4 - Softbank operations
Exhibit 5 - Major global/regional submarine cables with landing point in Japan - 2006
Exhibit 6 - Types of telecom convergence
Exhibit 7 - Japanese satellite TV - overview of broadcasters

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