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Japan Telecommunications Report Q1 2013

Japan Telecommunications Report Q1 2013

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Price $1,175.00
Meta Description Japan Telecommunications Report Q1 2013
Publisher Business Monitor International
Date of Report Sep 1, 2013
Quick Overview
BMI View: Japan's telecommunications market has played a key role in driving economic growth by
equipping consumers and businesses with a comprehensive network of fixed-line, mobile and broadband
services. Although the country is facing an ageing population and limited subscriber growth potential,
operators are able to maintain revenue growth through technological advancements as well as the
constant introduction of new products and services. 4G, which is starting to gain traction, will play a
vital role in the future.
Key Data:
?? The mobile market continues to expand, with penetration set to rise to 127% by 2017.
?? 3G and FTTH are services driving growth in the broadband sector. We expect fixed and mobile
broadband penetration to exceed 70% by end-2017, when 86% of the population is forecast to be
using internet services.
?? ARPU levels are expected to continue trending down despite the launch of 4G services as
traditional voice usage wanes.
Key Trends And Developments
Softbank has announced an agreement to acquire eAccess, which will make it the country's secondlargest
mobile operator. The transaction carries a hefty premium, which we believe is justified in light of
the limited subscriber growth potential in the mature market and strong competition from rivals. Although
the transaction will add 4mn subscribers to Softbank's customer base, we believe the premium was
largely for eAccess' network infrastructure and spectrum, which are valuable assets considering the
growing demand for mobile data.
KDDI, which owns stakes in both J:Com and JCN, has outlined a proposed schedule that will merge the
two companies by September 2013, with the new J:Com to be equally-owned by KDDI and Sumitomo
Corporation. According to KDDI, the new entity will have 52% of the multi-channel market and 49% of
the internet market. The deal will also enable cross-bundling of KDDI mobile services with J:Com fixedline,
broadband and pay TV offerings, while giving KDDI access to the J:Com network for data
offloading..
NTT DoCoMo's share price plunged to the lowest level since the firm began trading in 1998 after it
announced a downward revision of its fiscal year 2012/2013 (April-March) forecast due to higher
operating expenses. The higher operating expenses were the result of efforts to strengthen NTT
DoCoMo's cloud business, expansion into new business opportunities and higher equipment costs on the
back of an increase in handset purchase prices and the number of handsets sold to agent resellers.
KDDI launched 2.1GHz 4G/LTE services nationwide on September 21, 2012, followed by 800MHz and
1.5GHz services on November 2. The company claims to have the highest coverage of the three mobile
operators, set to rise to 96% of the population by March 2013. In 2013 KDDI plans to increase the speed
of the service from 75Mbit/s to 112.5Mbit/s.
Japan maintained its top position in BMI's latest Asia Pacific Telecoms Risk/Reward Ratings with a
Telecoms Rating score of 74.9. Although 2013 is shaping up to be a challenging year for the Japanese
economy, as the outlook for global growth dims and impediments in the domestic political scene continue
to stall progress on the policy front, the country has a highly competitive telecoms market and strong
customer demand for advanced services.
Table of Contents
Executive Summary ........................................................................................................................................ 5
BMI Industry View ........................................................................................................................................... 5
SWOT Analysis ................................................................................................................................................ 7
Japan Wireline SWOT .......................................................................................................................................................................................... 7
Japan Mobile SWOT ............................................................................................................................................................................................. 8
Japan Political SWOT .......................................................................................................................................................................................... 9
Japan Economic SWOT ...................................................................................................................................................................................... 10
Japan Business Environment .............................................................................................................................................................................. 10
Risk/Reward Ratings ..................................................................................................................................... 11
Asia Pacific ......................................................................................................................................................................................................... 11
Table: Asia Pacific Telecoms Risk/Reward Ratings Q113 .................................................................................................................................. 15
Japan .................................................................................................................................................................................................................. 16
Industry Forecast Scenario ........................................................................................................................... 19
Mobile ...................................................................................................................................................................................................................... 19
Table: Mobile - Historical Data And Forecasts, 2010-2017 ............................................................................................................................... 19
ARPU ....................................................................................................................................................................................................................... 21
Table: ARPU - Historical Data And Forecasts, 2010-2017 ............................................................................................................................... 21
Fixed Line ................................................................................................................................................................................................................ 23
Table: Fixed Line - Historical Data And Forecasts, 2010-2017 ......................................................................................................................... 23
Internet .................................................................................................................................................................................................................... 25
Table: Internet - Historical Data And Forecasts, 2010-2017 .............................................................................................................................. 25
Market Overview ............................................................................................................................................ 27
Mobile ...................................................................................................................................................................................................................... 27
Regional Perspective ............................................................................................................................................................................................... 27
Table: Japan Mobile Market Regional Comparisons, 2011 ................................................................................................................................ 28
Key Market Developments ....................................................................................................................................................................................... 28
Mobile Growth ......................................................................................................................................................................................................... 29
Market Shares .......................................................................................................................................................................................................... 30
ARPU .................................................................................................................................................................................................................. 32
Table: Japanese Blended ARPUs 2011-2012 (JPY) ............................................................................................................................................ 32
Table: Japanese Voice ARPUs 2011-2012 (JPY) ................................................................................................................................................ 33
Table: Japanese Data ARPUs 2011-2012 (JPY) ................................................................................................................................................. 34
Mobile Content/Value-Added Services ................................................................................................................................................................ 34
Value-Added Services Timeline........................................................................................................................................................................... 37
Table: Selected VAS Services, 2011-2012 ........................................................................................................................................................... 37
Mobile Operator Data ............................................................................................................................................................................................. 40
Table: Japan Market Overview ........................................................................................................................................................................... 40
Table: NTT DoCoMo .......................................................................................................................................................................................... 41
Table: KDDI ....................................................................................................................................................................................................... 42
Table: Softbank Mobile ....................................................................................................................................................................................... 43
Table: eAccess .................................................................................................................................................................................................... 44
Mobile Content ........................................................................................................................................................................................................ 45
Regional Outlook ................................................................................................................................................................................................ 45
Table: Selected NFC Developments, 2011 .......................................................................................................................................................... 46
Fixed Line ................................................................................................................................................................................................................ 51
Table: Selected Fixed-Line Operators' Subscriber Bases ('000) ......................................................................................................................... 51
Broadband ............................................................................................................................................................................................................... 53
Table: Number Of Broadband Subscriptions ('000) ........................................................................................................................................... 53
Table: NTT East And NTT West: ADSL/FTTH ('000) ......................................................................................................................................... 54
Industry Trends And Developments ............................................................................................................ 56
Networks ............................................................................................................................................................................................................. 56
Table: 3G Mobile Subscriber Market, June 2012 ............................................................................................................................................... 57
Table: Market Developments .............................................................................................................................................................................. 60
Regulatory Environment And Industry Developments ......................................................................................................................................... 63
Table: Regulatory Bodies And Their Responsibilities In Japan ........................................................................................................................... 63
Competitive Landscape ................................................................................................................................ 66
Competitor Analysis ............................................................................................................................................................................................ 66
Table: Key Players: Japan Telecoms Sector ....................................................................................................................................................... 66
Table: Selected Operator Revenues 2006-2012 (FY end-March 31 unless stated) (US$mn) ............................................................................... 66
Company Profiles .......................................................................................................................................... 67
NTT Corporation ................................................................................................................................................................................................ 67
KDDI Corporation .............................................................................................................................................................................................. 70
Softbank Corp ..................................................................................................................................................................................................... 74
Regional Overview ........................................................................................................................................ 78
Table: Vendor Revenues (US$mn) ...................................................................................................................................................................... 78
Table: Net Sales By Geography (EURmn) .......................................................................................................................................................... 79
NSN Selected Asia Activities ............................................................................................................................................................................... 81
Demographic Outlook ................................................................................................................................... 83
Table: Japan's Population By Age Group, 1990-2020 ('000) .............................................................................................................................. 84
Table: Japan's Population By Age Group, 1990-2020 (% of total) ...................................................................................................................... 85
Table: Japan's Key Population Ratios, 1990-2020 ............................................................................................................................................. 86
Table: Japan's Rural And Urban Population, 1990-2020 ................................................................................................................................... 86
Glossary Of Terms ........................................................................................................................................ 87
Table: Glossary Of Terms ................................................................................................................................................................................... 87
BMI Methodology .......................................................................................................................................... 88
How We Generate Our Industry Forecasts .............................................................................................................................................................. 88
Table: Key Indicators For Telecommunications Industry Forecasts .................................................................................................................... 88
Telecoms Business Environment Ratings ................................................................................................................................................................. 90
Risk/Reward Ratings Methodology ..................................................................................................................................................................... 90
Table: Ratings Indicators ................................................................................................................................................................................... 91
Weighting ............................................................................................................................................................................................................ 92
Table: Weighting Of Indicators .......................................................................................................................................................................... 92
Sources ............................................................................................................................................................................................................... 92




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