Anticipated Expansion in Japan's Communication Sector
In the vibrant landscape of Japan's telecommunications industry, a significant shift is underway. The growing preference among consumers for Over-The-Top (OTT) platforms like Netflix and Disney+ is set to impact the growth of pay-TV revenue, according to telecom analyst Neha Mishra of GlobalData.
This shift is driven by the rising demand for high-speed mobile data and robust fibre broadband adoption. The increasing popularity of streaming services and data-hungry applications has fueled the need for faster and more reliable internet connections.
NTT, a leading player in Japan's telecom and pay-TV services market, is at the forefront of this digital revolution. In 2024, NTT led both the mobile and fixed communication services market, a position it is expected to maintain due to its strong focus on technology innovation and advancements.
NTT's commitment to the future is evident in its active engagement in the research and development for 5G evolution and 6G technologies. This dedication was demonstrated by the launch of Japan's fastest 5G standalone service in July 2024, achieving download speeds up to 6.6 Gbps.
In the fixed communications market, NTT caters to a wide range of customers, from limited usage customers to premium users, through diverse tariff plans, including fixed-rate options and tiered pricing based on data usage.
The growth in 5G subscriptions will be supported by the ongoing 5G network expansion efforts of major Mobile Network Operators (MNOs) and the growing availability and affordability of 5G smartphones. This shift from 4G to 5G is expected to have a significant impact on the mobile data service revenue, which is projected to increase at a Compound Annual Growth Rate (CAGR) of 4% from $37.8 billion in 2024 to $45.9 billion in 2029.
Fixed broadband service revenue, on the other hand, will grow at a CAGR of 1.6% over the 2024-2029 period, driven by robust growth in Fibre-to-the-Home (FTTH) subscriptions. Japan has already achieved a global broadband speed record of 402 Tbps in July 2024, using existing fibre infrastructure.
Operators are monetizing this rising demand for high-speed data services through higher ARPU-yielding premium 5G plans. This strategy is expected to secure long-term subscriber loyalty and unlock new monetization opportunities in a competitive market.
However, the growth in pay-TV revenue is not as straightforward. While IPTV revenue is expected to grow, helping to partially offset declines in cable TV and Direct-to-Home (DTH) revenues, the overall pay-TV services revenue is projected to remain relatively stable from 2024-2029.
Mishra predicts that Japan's strong focus on R&D and infrastructure modernization, from 5G standalone to next-gen fibre optics, will play a crucial role in shaping the country's digital future. With operators like NTT leading the charge, Japan is poised to continue its trajectory as a global leader in telecommunications.
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