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Telecommunications industry in Japan - statistics and facts

Japan is a country with a highly developed infrastructure that enables its citizens to stay permanently connected to each other. The telecommunications industry generated sales of around 15.2 trillion Japanese yen in the fiscal year 2020, with mobile communications accounting for more than half of the sales during that year. Japan has not only a high internet penetration rate, but also a large number of mobile internet users, which reflects the increasing adoption of smartphones in the 2010s. While the smartphone penetration rate is already at a high level, the share of people who use smartphones is expected to grow even further in the coming years.

Major players in the Japanese telecommunications market

A breakdown of the number of subscriptions to telecommunication services shows that the number of mobile phone subscriptions far exceeds the number of citizens in Japan. People predominantly rely on an advanced Long-Term Evolution (LTE) network, which enables high-speed mobile communications. While fixed phone services steadily lost subscribers in recent years, fiber to the home (FTTH) subscriptions continue to grow. The fixed line market in Japan is dominated by Nippon Telegraph and Telephone (NTT) Corporation and its subsidiaries, such as NTT East and NTT West. NTT Corporation evolved out of the privatization of Nippon Telegraph and Telephone Public Corporation in 1985 and is one of the leading telecommunication operators worldwide based on revenue. The mobile telecommunications market, on the other hand, is dominated by the three large mobile carriers NTT Docomo, KDDI Corporation, and SoftBank Corp. NTT Docomo, which is also a subsidiary of NTT Corporation, holds the largest market share when it comes to mobile phone subscribers in Japan.

Increasing market competition

All three major mobile carriers have been facing increasing competition as the market share of mobile virtual network operators (MVNOs) steadily increased in the past few years. MVNOs operate by leasing network capacity from regular mobile network operators (MNOs), which enables them to target more specific customer groups by offering cheaper and more flexible data plans. The average monthly fees for mobile phone contracts were considerably higher in the case of the three major carriers. Rakuten Mobile, Inc., which had started its operations in the mobile telecommunications business in 2014 as an MVNO, became the country’s fourth proper MNO in 2020. Incidentally, the year 2020 also marked the introduction of commercial 5G services to the Japanese market. While NTT Docomo, KDDI, and SoftBank started rolling out their 5G networks in March, Rakuten Mobile followed in September. It has been reported that the four carriers will spend more than 14 billion U.S. dollars within the course of five years in order to establish their 5G networks.


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