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Japan's total telecom and pay-TV services revenue is poised to increase from USD 97.6 billion in 2023 to USD 108.3 billion in 2028, at a compound annual growth rate (CAGR) of 2.1%.

The increase is mainly driven by the growth in the mobile data and fixed broadband service segments.

According to GlobalData’s Japan Telecom Operators Country Intelligence Report, while revenue from mobile voice services will decrease, revenue from mobile data services will continue to increase as users shift to engaging with over-the-top (OTT) communication apps.

Moreover, the anticipated surge in revenue from mobile data services will be propelled by the sustained expansion of smartphone and M2M/IoT (Machine-to-Machine/Internet of Things) subscriptions, alongside the increasing embrace of 5G services, which offer elevated Average Revenue Per User (ARPU) data.

5G Adoption and Revenue Growth Correlation

Sarwat Zeeshan, Telecom Analyst at GlobalData, highlighted the significance of the widespread adoption of 5G services in revenue growth. While 4G services accounted for the majority share in the mobile subscriptions market in 2023, the rising demand for 5G and the growing availability of this network will lead to its widespread adoption that could surpass 4G’s share by 2026.

“For example, NTT DOCOMO aims to expand 5G network coverage to 90% of the country’s population by the end of 2024,” said Zeeshan.

During the same forecast period, the fixed broadband service revenue is also expected to grow at a CAGR of 1.2%, due to the growing need for fast internet connectivity, resulting in an increase in the number of fiber-optic access lines. On the other hand, fixed voice services are expected to weaken as a result of the decreasing circuit-switched subscriptions.

“Growing demand for high-speed broadband connectivity, [the] 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,” explained Zeeshan.

Lastly, the pay-TV service segment faces the prospect of declining subscriptions, primarily attributable to the rising prominence of Over-the-Top (OTT) video alternatives. As viewers seek greater flexibility and diverse content offerings, they are increasingly turning to OTT platforms, which provide on-demand access to a wide array of entertainment options.

This shift reflects evolving consumer preferences towards customizable, on-the-go viewing experiences that transcend traditional cable or satellite subscriptions. As a result, the pay-TV industry is compelled to adapt its offerings and business models to remain competitive in an ever-changing media landscape.


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