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Japan Broadband Overview

Japan has been relatively late in joining the broadband revolution, but started to show rapid growth in 2001. A major reason for the delay has been the slow liberalisation of the Japanese telecommunications market, which has allowed the incumbent NTT (Nippon Telegraph and Telephone) to control the market in many ways. This proved unfavourable to broadband development in initial stages.

Liberalisation began in 1999, when NTT was re-organised into a holding company with five major businesses, namely NTT East, NTT West (local telephone companies), NTT Communications (long distance), NTT DoCoMo (mobile), and NTT Data (information services). Following liberalisation broadband growth picked up rapidly, and between 2001 and 2007 the number of broadband subscribers per 100 inhabitants in Japan increased 9 fold. By the end of 2007, Japan was the third largest broadband nation in the world after USA and China.

Despite liberalisation, the government still owns over 30 per cent of NTT. As a result, the operator faced less pressure from capital markets for short-term profits and was less nervous to invest in fibre network deployment. Also, NTT used profits from its mobile division, NTT DoCoMo, to invest in FTTH, and today NTT has the largest FTTH network in the world in terms of homes passed.

As of May 2008, there were 103.35 million mobile subscribers in Japan. NTT DoCoMo held about 42 per cent market share with over 44 million subscribers. Its key rivals include KDDI and Softbank (previously Vodafone Japan). In the same period, there were 90.1 million 3G enabled mobile phones. Softbank is working hard to turn around Vodafone Japan that had been failing to keep up with its rivals NTT DoCoMo and KDDI in the 3G service market due to its low key image and service quality.