OTT voice apps and free calls drive revenue decrease

Japan's mobile voice revenue is expected to decline 7% annually.

Japan’s mobile voice service revenue is expected to experience an annual decline of 7% through 2028, driven by the increasing preference for over-the-top (OTT) voice applications and the inclusion of free voice minutes in internet packages, according to Hrushikesh Mahananda, Telecom Research Analyst at GlobalData.

"Traditional mobile voice service revenue was the major revenue contributor to the overall mobile services market," said Mahananda. "Yet, over the years, smartphones and mobile broadband subscribers have been significantly shifting their preference to using OTT voice applications."

Mahananda noted that the transition to OTT applications has been a major factor in the revenue decline, as these apps offer more engaging features than traditional mobile voice services. Additionally, mobile network operators have been offering internet packages that include free voice call minutes.

In contrast, Japan's mobile data service revenue is expected to see significant growth, with a projected compound annual growth rate (CAGR) of 5.7% through 2028. This growth is attributed to the widespread adoption of IT services and the continuous expansion of 5G networks. "Japan is an advanced market when it comes to adoption of mobile broadband services, given the widespread availability and higher adoption of IT services," Mahananda said.

Mobile operators in Japan are making concerted efforts to expand their 5G networks, aiming to reach 95-97% of the population by 2025 and cover 99% by 2030. This expansion, coupled with the growth of smartphones and machine-to-machine (M2M) subscriptions, has increased the demand for high-speed mobile broadband connectivity. 

Japan's monthly mobile data usage is also notable on a global scale. The country ranks fourth among developed markets in the Asia-Pacific (APAC) region for mobile data usage, trailing behind Taiwan, South Korea, and Australia. "Japan is a highly connected and technology-driven society," Mahananda stated. "That just explains the reason why there's a tremendous increase in mobile data usage."

Despite ranking fourth, Japan is expected to witness higher growth in mobile data usage compared to its peers. This growth is further supported by operators offering data-centric plans bundled with OTT services.