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Report: Japan's Telecom Market to Grow at 1.1 Percent through 2013


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February 10, 2009

Report: Japan's Telecom Market to Grow at 1.1 Percent through 2013

By Shireen Dee, TMCnet Contributor

New research from Pyramid Research reportedly shows that the telecommunications services market in Japan will increase by 1.1 percent annually for the next five years.

The research also notes revenue growth for various services – including VoIP, IPTV (News - Alert) and mobile data solutions – that will help to cover growth declines in legacy service offerings.
“The main growth engine will be data services, in both the fixed and mobile sectors. Revenue from mobile data will grow at a 7.2 percent CAGR (Compound Annual Growth Rate) during the next five years, driven by increased mobile Internet usage,” said Tae-Hyung Kim, analyst at Pyramid Research and author of the report. “In the fixed sector, migration to fiber from DSL (domain-specific language) and VoIP uptake will be the key drivers for revenue growth. As such, revenue from broadband and VoIP will grow at CAGRs of 6.1 percent and 10.4 percent, respectively.”
In 2008, Japanese telecommunication services showed a decline in revenue growth. There was a decrease of 1.2 percent as the Japanese telecom industry was only able to contribute 12.5 trillion yen in revenue, last year. However, despite the drop in revenue growth, the estimated value of the Japanese telecom industry grew by 11 percent as a result of the success of the Japanese Yen on world currency markets. In 2008, the overall value of Japan’s telecom services was $120.4 billion.
An earlier report published by Pyramid Research evaluated the success of IPTV services and predicted a 500 percent growth in its subscriber base in a four year span. The inclusion of these IPTV services in broadband packages offered by various telephone companies has facilitated this to an extent.
“Given favorable policies for convergent services, especially regarding IPTV, we also forecast that revenue from IPTV will grow at a CAGR of 25.6 percent during the next five years,” said Kim.
The Japanese telecommunications regulator will have to make some important decisions in 2009 with regard to IPTV and spectrum licensing, according to Kim.
“Content sharing and distribution is a make or break issue for IPTV players, and the regulator must find a stance that can effectively address the concerns of interested parties,” Kim said. “With regards to LTE (News - Alert) (Long Term Evolution), the regulator must also find ways to offer more than just two licenses if it wishes to keep the market competitive.”

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Shireen Dee is a contributing editor for TMCnet. To read more of Shireen's articles, please visit her columnist page.

Edited by Michael Dinan

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