Wednesday, 02 December 2020

SoftBank and KDDI have $38bn 5G investment plan

by Harry Baldock, Total Telecom
Wednesday 04 November 20

The two Japanese telcos are shaping up for major investment in the new technology, in part to make up the tech gap between themselves and their more deployed neighbours, China and South Korea

Reports suggest that two of Japan’s biggest mobile operators are set to pump $38 billion into 5G over the next decade. The next-generation technology is expected to bring a major boost to the country’s economy – but only if it can be deployed efficiently and at scale.    Despite all SoftBank, KDDI and NTT DoCoMo all launching 5G back in March…

Reports suggest that two of Japan’s biggest mobile operators are set to pump $38 billion into 5G over the next decade. The next-generation technology is expected to bring a major boost to the country’s economy – but only if it can be deployed efficiently and at scale. 
 
Despite all SoftBank, KDDI and NTT DoCoMo all launching 5G back in March, and newcomer Rakuten doing the same in September, coverage throughout Japan currently remains very limited, primarily centred around Tokyo and other major population hubs. 
 
This leaves the country somewhat trailing some of its neighbours. South Korea, for example, is often touted as being the world leader in 5G, having already achieved around 90% population coverage with the new technology. Meanwhile China is also continuing its deployment on a massive scale, having already accrued over 110 million 5G subscribers and built around 600,000 base stations – though experts suggest that around 10 million base stations will be required in total to provide the country with 5G coverage equivalent to that of 4G.
 
SoftBank has made a commitment to investing $19 billion over the next 10 years, with plans to develop a 5G network of 350,000 base stations, 50,000 of which it hopes will be complete by March 2022, with 200,000 finished by 2025. The operator currently has just 10,000 5G base stations in operation.
 
KDDI has plans of similar scale, though at this point they are less explicit; the company says it will also be investing $19 billion by 2030 and is aiming to match SoftBank’s goal of 50,000 base stations by March 2022.
 
Naturally, NTT DoCoMo (in the process of being reabsorbed by NTT proper) and Rakuten Mobile both also plan to expand their 5G coverage significantly. 
 
The announcement of increased investment comes at a time of pressure for the Japanese telcos, who are being told by the government to lower their mobile plan prices, which are some of the highest in the world. Just last week, KDDI and SoftBank both announced new low-cost plans, but in many ways this is merely lip service – both operators new plans are for their sub-brand customers (Y! Mobile and UQ), which are not subscribed to by more than 80% of their customer base, meaning the vast majority of their customers will be unaffected. 
 
With the government trying to drive down mobile prices and cost of deploying 5G at scale increasing, it is imperative that Japan’s telcos find a way to monetise the new technology effectively. 
 
 
 
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