Japan’s telecom and pay-TV services market is projected to grow at a compound annual growth rate (CAGR) of 2.2 percent from 2024 to 2029, according to GlobalData. This growth will be fueled by rising demand for high-speed mobile data and the widespread adoption of fiber broadband, even as traditional voice and pay-TV segments face ongoing declines.
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Mobile data services will be the key revenue driver, with income expected to rise from $37.8 billion in 2024 to $45.9 billion in 2029, at a CAGR of 4 percent. Growth is supported by the continued uptake of smartphones and increasing mobile internet usage on 4G and 5G networks. Operators are capitalizing on this demand by introducing premium 5G plans that yield higher average revenue per user (ARPU).
While 4G dominated the mobile market in 2024, its share will decline as users migrate to 5G, supported by aggressive 5G rollout strategies from leading operators like KDDI and SoftBank. The two plan to construct 100,000 base stations each by March 2031 through their 5G Japan Corporation venture.
Japan had roughly 196 million mobile subscriptions in 2022, with about 30 percent on 5G, 67 percent on 4G, and the remainder on 3G. 3G subscribers are expected to phase out by 2024–2026.
NTT Docomo spent around ¥714 billion (~US $4.9B) in capex in fiscal year 2024 and plans to increase spending by ~23 percent in 2025 to support ongoing 5G rollout, including boosting urban base‑station counts by ~20 percent. The broader NTT Group has earmarked ¥2.13 trillion in capital investment for FY 2025. It is also investing ¥233.6 billion to acquire a ~66 percent stake in SBI Sumishin Net Bank as part of a ¥739 billion deal.
KDDI (au) has partnered with SoftBank in a joint 5G venture, saving around ¥45 billion in capex between FY 2020–23 and expecting ¥120 billion in savings per company by FY 2030. Its 5G investment peaked earlier, freeing up capital to diversify into AI and data‑centers.
SoftBank is part of the same 5G JV with KDDI, sharing similar savings on infrastructure as above. Its parent SoftBank Group is simultaneously investing globally in AI infrastructure ($100B over four years in the U.S.) and contributing $15–25B to OpenAI by early 2025—but mobile-specific capex is part of that broader context.
Rakuten Mobile invested ¥168 billion in 2023, ¥81 billion in 2024, and plans to ramp up to ¥150 billion in 2025, supporting its cloud‑native 5G build‑out. Since launch, it’s cumulatively invested about ¥1.8 trillion (~US $11.8B) in its network while cutting expected capex through roaming deals with KDDI (~¥300 billion reduction for 2023–25).
In the fixed-line segment, fixed voice revenues will continue to decline due to reduced circuit-switched usage and falling ARPU. In contrast, fixed broadband revenues are forecast to grow at a CAGR of 1.6 percent, propelled by the increasing uptake of fiber-to-the-home (FTTH) services. Fiber broadband accounted for the majority of fixed broadband connections in 2024, bolstered by government initiatives aiming for 99.9 percent national fiber coverage by 2027.
Japan’s fiber leadership was reinforced in July 2024 when the National Institute of Information and Communications Technology (NICT) set a global broadband speed record of 402 Tbps using existing fiber infrastructure, highlighting the potential of next-generation fiber networks.
Japan’s fixed broadband market is led by major operators such as NTT East and NTT West (under NTT Group), KDDI, and SoftBank. NTT Group dominates the market through its FLET’S Hikari fiber services, which are widely used by both retail and wholesale customers, including other ISPs. The group is heavily investing in upgrading to 10 Gbps-class fiber services and expanding its IP network infrastructure to support growing demand. As of 2024, Japan has over 45 million fixed broadband subscriptions, with more than 80 percent of them being fiber-based.
KDDI promotes its “au Hikari” service, backed by its own infrastructure and partnerships, and continues to invest in high-speed connectivity and bundled offerings. SoftBank offers broadband through “SoftBank Hikari,” relying partly on NTT’s infrastructure, and is focused on improving service quality and expanding into smart home solutions.
The operators are directing investments toward improving fiber speeds, network reliability, and supporting future technologies like 6G and AI integration. The Japanese government also supports broadband expansion through infrastructure subsidies and digital inclusion initiatives in rural areas.
Pay-TV revenues are expected to remain flat through 2029. A modest rise in IPTV revenue will help counterbalance the ongoing declines in cable and DTH subscriptions. The growing popularity of OTT platforms such as Netflix and Disney+ will further weigh on traditional pay-TV performance.
NTT remains the dominant player in both mobile and fixed markets, leveraging its broad service portfolio and strong R&D investments. The operator recently launched Japan’s fastest 5G standalone service, delivering download speeds of up to 6.6 Gbps. NTT also offers diverse fixed broadband pricing models, including usage-based and flat-rate plans to address different customer segments.
Japan’s sustained investment in 5G standalone, fiber innovation, and next-gen technologies positions it at the forefront of global digital connectivity. Operators that focus on innovation-driven, high-value service offerings will be best placed to capture market share and build long-term customer loyalty.
Baburajan Kizhakedath
