26 Aug 2011Japan Broadband Overview

Japan was relatively late in joining the broadband revolution, but started to show rapid growth in 2001. A major reason for the delay was the slow liberalisation of the telecommunications market, which allowed the incumbent NTT (Nippon Telegraph and Telephone) to control the market in many ways. Despite this, 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 by the end of 2009 Japan became the third largest broadband nation in the world after the USA and China. At the end of 2010 it held the third position globally in terms of Broadband Quality Score, surpassed only by South Korea and Honk Kong.

The Japanese Government had an even more ambitious target to provide 100 per cent broadband coverage and 90 per cent ultra high speed FTTH coverage by March 2011. This was outlined in the so called Elimination of Zero Broadband Areas policy. This goal has been backed by consistently heavy investment over the last decade, with JPY 865 billion invested in 2008 alone. In the meantime, fixed line market is shrinking due to the increasing popularity of VoIP and mobile communications including 3G.

The March 2011 earthquake and tsunami did affect the telecoms infrastructure and revenues. However, the impact on different operators varied, with some suffering a significant drop in profit (38 per cent for DOCOMO) while others still managed to grow their bottom line (e.g. 20 per cent in the case of KDDI). Various operators had to spend millions of yen to repair their infrastructure.