Japan’s telecom and pay-TV industry is expected to expand at a compound annual growth rate (CAGR) of 2.2% between 2024 and 2029, propelled by increasing demand for ultra-fast mobile connectivity and wider fiber broadband access. Although voice and traditional television services are seeing a downturn, “accelerating 5G penetration and advancements in fiber technology position Japan as a global leader in digital connectivity transformation,” according to GlobalData, a prominent data and analytics firm.
Insights from GlobalData’s Japan Telecom Operators Country Intelligence Report indicate that mobile data services are projected to climb at a CAGR of 4%, rising from $37.8 billion in 2024 to $45.9 billion in 2029. This is attributed to the expanding base of smartphone users and growing reliance on mobile internet, particularly over 4G and 5G networks. As noted in the report, “Operators too are monetizing the rising demand for high-speed data services through higher ARPU-yielding premium 5G plans, adding to revenue growth.”
Neha Mishra, Telecom Analyst at GlobalData, says: “4G services accounted for the largest share of mobile services market, in terms of subscriptions, in 2024. However, its share will decline over the forecast period due to the continued migration of subscribers to 5G services.”
Growth in 5G subscriptions will be supported by the ongoing 5G network expansion efforts of all major MNOs and the growing availability and affordability of 5G smartphones and segmented 5G plans. For instance, KDDI and SoftBank plan to expand their 5G networks by jointly building 100,000 base stations each by March 2031, through their 5G Japan Corporation joint venture.
In the fixed communication services segment, fixed voice service revenue will decline over the forecast period, due to a drop in circuit switched subscriptions and a decline in voice ARPU levels. Fixed broadband service revenue, on the other hand, will grow at a CAGR of 1.6% over 2024-2029 period, driven by robust growth in FTTH subscriptions.
Mishra adds: “Fiber lines led the fixed broadband services market in terms of total broadband connections in 2024, driven by the growing demand for high-speed internet connectivity and the government’s push for nationwide fiber expansion. For instance, the country is advancing its goal of achieving 99.9% fiber coverage by 2027
Japan also set a global broadband speed record of 402 Tbps in July 2024, achieved by the National Institute of Information and Communications Technology (NICT) using existing fiber infrastructure. This milestone underscores the capabilities of fiber networks in enabling ultra-high-speed data transmission, reinforcing Japan’s leadership in fiber innovation.
Pay-TV services revenue in Japan will remain flat through 2029, as growth in IPTV revenue will help partially offset the decline in cable TV and DTH revenues over the forecast period. Growing consumer preference for OTT platforms like Netflix and Disney+ will also impact pay-TV revenue growth in the country.
NTT led both the mobile and fixed communication services market in Japan in 2024 and will maintain its lead, given its strong focus on technology innovation and advancements. The telco is actively engaged in the research and development for 5G evolution and 6G technologies. For instance, in July 2024, NTT launched Japan’s fastest 5G standalone service, achieving download speeds up to 6.6 Gbps.
In fixed communications market, NTT caters to a wider customer base i.e., from limited usage customers to premium users through its diverse tariff plans, including fixed-rate options and tiered pricing based on data usage.
Mishra concludes: “Japan’s strong focus on R&D and infrastructure modernization, from 5G standalone to next-gen fiber optics, will play a pivotal role in shaping the country’s digital future. Operators that leverage this innovation to create tailored, high-value offerings will secure long-term subscriber loyalty and unlock new monetization opportunities in an increasingly competitive market.”