Japan's 5G networks evolution to drive market growth

Major telcos all part of network coverage expansion.

In Japan, where KDDI and SoftBank are jointly building 100,000 base stations each by 2031, 5G networks evolution is set to drive market growth over the next five years.

"The evolution of 5G networks, which offer ultra-low latency, high-bandwidth connectivity, and the capacity to connect massive number of devices crucial for M2M/IoT (machine-to-machine / Internet of Things) ecosystems, will be crucial for market growth over the forecast period," said GlobalData Telecom Analyst Sarwat Zeeshan.

"Enterprise 5G penetration and mature digital infrastructure is expected to drive M2M/IoT adoption in the country."

According to GlobalData, 5G mobile subscriptions in Japan are expected to grow at a compound annual growth rate (CAGR) of 13.4% during 2025-2030. The projected growth is being attributed to the ongoing 5G network coverage expansion efforts by all of the country's major telecommunications companies.

Meanwhile, during the same timeframe, Japan's total M2M/IoT cellular subscriptions are estimated to grow at a CAGR of 11.7%, reaching approximately 110 million by the end of 2030. The key growth drivers include 5G advancements, digital infrastructure expansion, and the rise in use cases for IoT ecosystems.

"The growing demand for enterprise-grade IoT solutions and connectivity is poised to significantly transform the mobile services market in Japan," Zeeshan commented. "This transformation presents telcos with opportunities for new revenue streams and diversification.

"KDDI and NTT Docomo lead the M2M/IoT market in terms of cellular connections, thanks to their strong focus on 5G network expansion and modernisation, which is crucial for enabling IoT connectivity. These telcos are also offering dedicated M2M/IoT plans targeted at applications such as smart factory, remote monitoring, real-time vehicle management and fleet tracking, and asset management."

Use cases for M2M/IoT can be seen in manufacturing, healthcare, agriculture, transportation, security, and digital infrastructure applications.

In a related development, Nokia has widened its partnership with SoftBank via a new deal to supply advanced 4G and 5G radio access equipment.

SoftBank Executive Vice President and Chief Technology Officer Hideyuki Tsukuda stated: "This enhanced partnership with Nokia helps us to build a unique and high-quality 5G network powered by AI (artificial intelligence).

"The upgraded network will improve efficiency, reduce emissions, and deliver a superior user experience to our customers."