The total telecom and pay-TV services revenue in Japan is expected to increase at a compound annual growth rate (CAGR) of 2.1% from $97.6 billion in 2023 to $108.3 billion in 2028, primarily supported by the mobile data and fixed broadband service segments, according to GlobalData, a leading data and analytics company.

GlobalData’s Japan Telecom Operators Country Intelligence Report reveals that the mobile voice service revenue will decline over the forecast period, in line with the steady decline in mobile voice service ARPU, with users increasingly shifting to OTT-based communication apps.

Mobile data service revenue, on the other hand, will continue to increase driven by the continued growth in smartphone and M2M/IoT subscriptions, and growing adoption of 5G services that yield higher data ARPU.

Sarwat Zeeshan, Telecom Analyst at GlobalData, says: “4G services accounted for a majority share of the overall mobile subscriptions in 2023 in Japan. However, its subscription share will decline drastically over the forecast period, due to subscribers’ migration to 5G services. 5G subscriptions will increase at a rapid pace and surpass 4G’s share of subscriptions in 2026, driven by the rising demand and growing availability of 5G services with telcos’ expanding their 5G networks and offering discounted 5G plans. For example, NTT Docomo aims to expand 5G network coverage to 90% of the country’s population by the end of 2024.

In the fixed communication services segment, fixed broadband service revenue will grow at a CAGR of 1.2% over 2023-2028 period, supported by the steady growth in fiber-optic access lines, on the back of rising demand for higher speed broadband connectivity and fiber roll outs by operators and the government. Fixed voice services, on the other hand, will continue to weaken given the steady decline in circuit-switched subscriptions.

Zeeshan adds: “Growing demand for high-speed broadband connectivity, government’s focus on fiber-optic network expansion in the country, and the gradual phasing out of DSL services in the country will support growth in fiber broadband subscriptions over the forecast period. Japan has set a target to expand fiber-optic networks to 99.9% of households by the end of 2028.”

Pay-TV service segment will see a steady decline in subscriptions over the forecast period, due to subscription losses in the cable TV and DTH segments as a result of growing adoption of OTT video alternatives.

Zeeshan concludes: “NTT Docomo topped mobile, fixed voice, and fixed broadband service segments, by subscriptions in 2023. Its ongoing expansion of 5G network and focus on M2M/IoT offerings will help the operator maintain its leadership in the mobile services segment. In the fixed broadband segment, its focus on offering varied tariff plans based on data usage, will attract customers from entry level to premium level.”