Japan’s Mobile Service Revenue to Reach $87.9 bn, Driven by Data Services and 5G Adoption

Japan’s mobile service revenue is set to experience a substantial growth trajectory over the next five years, according to a recent forecast by GlobalData. The report highlights the key drivers behind this growth and predicts significant changes in consumer behavior and technological adoption.
5G growth in Japan 2024The forecast indicates that Japan’s mobile service revenue is on track to achieve a compound annual growth rate (CAGR) of 6.2 percent from the current $65 billion in 2023 to an impressive $87.9 billion by 2028. The driving forces behind this surge lie in the mobile data service segment, which is expected to play a pivotal role in shaping the industry’s landscape.

GlobalData’s Mobile Broadband Forecast for the second quarter of 2023 reveals a projected decline in mobile voice service revenue in Japan, anticipating a CAGR drop of 0.8 percent during the forecast period. This shift can be attributed to the increasing prevalence of over-the-top (OTT) communication platforms, leading to a decrease in the average revenue per user (ARPU) levels for voice services.

In contrast, mobile data service revenue in Japan is projected to exhibit robust growth, boasting an anticipated CAGR of 8.2 percent between 2023 and 2028. This surge can be attributed to the persistent rise in smartphone subscriptions and the projected increase in high-ARPU yielding 5G subscriptions.

Hrushikesh Mahananda, Telecom Research Analyst at GlobalData, emphasizes the role of evolving consumer habits in this transformation.

The average monthly data usage in Japan is forecast to increase significantly, propelled by the consumption of online video and social media content on smartphones. This trend is facilitated by the growing adoption of 5G services and data-centric packages offered by mobile network operators (MNOs).

The report also offers insights into the technological shift within the mobile subscription landscape. While 4G technology will continue to dominate in terms of subscriptions until 2025, the scenario is poised to change. 5G subscriptions are expected to surpass 4G subscriptions, constituting a remarkable 79 percent share of total mobile subscriptions by 2028. This shift is driven by major mobile operators’ initiatives to expand 5G networks across Japan.

NTT Docomo, a leading player in the Japanese mobile services market, is projected to maintain its dominance in terms of subscriptions until 2028. This is attributed to NTT Docomo’s strategic focus on expanding its 5G network coverage across the country, with an ambitious goal of reaching 97 percent of the population by 2024. NTT Docomo’s forward-looking approach is exemplified by its collaborations with technology giants Nokia, NEC, and Fujitsu to pioneer experimental trials for 6G services, which it aims to bring to the commercial forefront by 2030.

As Japan continues to embrace cutting-edge mobile technologies and adapt to changing consumer preferences, the mobile service industry is set to undergo significant transformations, ultimately driving substantial revenue growth and shaping the future of communication and connectivity.