Market Trends of japan data center Industry
Rising smartphone penetration rate and emergence of new e-commerce platform in the country would drive the market
- The total number of smartphone users in Japan was 107.1 million in 2022. It is expected to witness a CAGR of 1.3% during the forecast period, reaching 117.77 million by 2029.
- In 2021, the smartphone penetration rate among households in Japan was close to 89%. The average time people spend on mobile internet use has increased in recent years, offering business opportunities to related industries, such as e-commerce.
- With the emergence of online shopping platforms, small businesses are also switching to online modes of payment and digital presence in the e-commerce world. The big and well-established companies also incorporate e-commerce platforms and the traditional form of business. For instance, in April 2022, Westlake Akishima, a Tokyo-based major supplier of specialty stabilizers for the PVC industry, announced a new e-commerce platform, extending the online buying experience to its buyer with security and convenience. Such developments are shaping the e-commerce and online payment ecosystem, impacting mobile payments in Japan.
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Expansion of 5G roll out by major mobile operators coupled with government support in same segment would drive the data center market
- The Japanese government assigned the three mobile operators in Japan — NTT Docomo, KDDI au, and Softbank, as well as the new arrival Rakuten Mobile, with 5G spectrum in April 2019. In the coming years, the four Japanese carriers are expected to spend more than USD 14 billion in capital expenditures, including investments in base stations, servers, and fiber optics, to build their 5G networks.
- Since the start of 2021, Japan’s mobile operators have been accelerating their 5G rollout. SoftBank aimed to deploy over 50,000 5G base stations and reach 90% population coverage by the end of March 2022. KDDI au aims to boost from just 10,000 base stations in March 2021 to 50,000 a year later. NTT DoCoMo was expanding its 5G network during 2021, aiming to reach 10,000 base stations by June and 20,000 by the end of March 2022, with 55% population coverage using the new high-speed 5G spectrum.
- The Ministry of International Affairs and Communications aims to continue moving the Japanese 5G experience forward. It set a target of 98% 5G population coverage by the end of March 2024. Overall, Japan aims to boost the amount of spectrum available for 5G services.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Growing inclusion of online businesses along with streaming and online TV adoption leads to the data center demand
- Government initiative towards national broadband strategy and fixed network investment by telecom companies is boosting the market demand
- Government investment of JPY 50 billion on subsea cable and data center decentralization would increase data center demand
