New services fueling Japan's telecom growth -- study

01 Sep 2006
00:00

The expansion of 3G services, the uptake of fiber-to-the-home (FTTH) services, the increasing use of VoIP and the continuing rollout of triple play services are driving growth in the Japanese telecom industry this year.

According to a recent country report from Buddle, 3G leader KDDI and NTT, which has managed to close in on the former's lead, will be locked in head-to-head combat this year in the 3G services arena.

Dominant ADSL and VoIP player Softbank, however, following its purchase of Vodafone K.K. and its acquisition of two 3G licenses, will be the player to watch in this market.

The Japanese 2G wireless market, while already in the mature stage, will still be in "a dynamic period of activity" this year, due mainly to the buoyancy of the mobile data segment and the popularity of camera phones.

Despite the advent of 3G, wireless Internet has kept the 2G market active. While trailing KDDI in the 3G space, NTT DoCoMo holds a comfortable lead over rivals, including Vodafone K.K., in the 2G mobile market, cornering 50% of all subscribers there.

VoIP is also expected to explode in Japan in the coming months, with the number of Internet phone lines seen reaching 28 million by end-2007 from 9 million as of last year.

ADSL take-up, although representing 65% of the total broadband market as of early this year, may wane in the coming months with the advent of FTTH, which presents a serious broadband service option. The FTTH subscriber base hit the 5-million milestone early this year, according to Buddle.

In the midst of all this activity, Japanese telecom industry players face the challenge of completely replacing their domestic fixed-line telephone network with a fully integrated IP system. KDDI plans to do this by the start of 2008, while NTT will implement a similar plan in 2010.

With NTT still owning most of Japan's telecom infrastructure, KDDI and Softbank have been doing everything they can to bypass NTT's system in whatever way possible, setting the scene for some interesting investment moves. - telecomasia.net

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