Japan 5G Base Station Equipment Market - Forecasts from 2023 to 2028

Japan 5G base station equipment market is projected to grow at a CAGR of 14.89% to reach US$1,860.216 million by 2028, from US$808.837 million in 2022.

GROWTH DRIVERS

Government Initiatives and Rural Base Station Expansion

The government of Japan announced the deployment of 5G technology in March 2020. Four mobile carriers, such as NTT Docomo, Softbank, KDDI, and Rakuten, have been given the license for the rollout of 5G technology.

The 5G Introduction Promotion Tax was modified as part of the tax reform for FY2022 to hasten base station expansion, particularly in rural areas, to realize the "Vision for a Digital Garden City Nation." To encourage aggressive development over the following three years, its application timeframe has been increased by three years with the implementation of declining tax credit rates. The table below displays the list of qualifying enterprises, tax credit rates, and so on.

Growing Investments

Owing to increased government initiatives for the smoother deployment of 5g across Japan, various investment plans can also be witnessed. For instance,

• MIC has announced “Master Plan 3.0 on the Regional Development of ICT Infrastructure”. The plan would include the deployment of 280 thousand base stations 5G by FY2023. The plan also includes the maintenance of infrastructure, including rural areas and tunnels. The plan also includes the promotion of local 5G (Private 5G) system implementation.
• KDDI and Softbank announced their plans to invest $38B in 5G over the next ten years. The companies have also formed a joint venture to focus on setting up 5G networks in Japan's rural areas.

DEPLOYMENT RATE OF 5G BASE STATIONS

The government has announced the expansion of 5G across Japan. Initially, they had planned to expand the deployment of 5G with a rate of 6.9%, but in 2020, the rate of deployment of 5G base station reached 16.50%.

EMERGING OPPORTUNITIES IN THE JAPAN 5G BASE STATION EQUIPMENT MARKET

Standalone

It is among the core elements of the 5G network. Connectivity, mobility, and user authentication, as well as other essential management functions, are implemented through Standalone (SA). Owing to its growing usage for the expansion of 5G technology in Japan, various market players are investing to expand their distribution networks as well as product portfolios. For instance,

• Softbank announced the deployment of a 5G Multi-access Edge Computing (MEC) site in the Kanto region of Japan. The corporation’s MEC delivers a low-latency and secure service experience. It uses its 5G SA core network with compute servers at the network’s edge. The company formed a strategic alliance with F5, its cloud partner.
• In 2020, NEC Corporation announced its selection by NTT DOCOMO as a supplier of a 5G mobile core network (5GC) compatible with Standalone (SA) 5G, which NTT DOCOMO intends to introduce in 2021. The SA 5GC features flexible operations, which are enabled by the adoption of container technology.

O-RAN

The emergence of several base station regulations and standards, in addition to their transition to open systems, along with developments in hardware performance, has enabled the global adoption of Open RAN, permitting the procurement of equipment from many manufacturers.

Various O-RAN tests have been announced for a better understanding of the current system. For instance, in March 2022, UK and Japan agreed to strengthen their cooperation to diversify the technology used in telecoms networks to support the move towards O-RAN. They agreed on several joint initiatives to support efforts to reduce the global overreliance on a small number of suppliers to build and maintain telecom networks. Both nations committed to greater information sharing and deeper cooperation on R&D, particularly O-RAN.

MAJOR PLAYERS IN THE MARKET

Some of the leading players in the market include Ericsson, Nokia, Futijsu, and NEC. These firms have undertaken various business strategies such as product launches, investments, and partnerships to expand their product offerings. For instance,

• In December 2021, NEC entered into contracts with Docomo. Through the partnership alliance, NEC Corporation and Docomo have successfully tested for 5G standalone (SA) in Tokyo. The testing was done using a 5G base station baseband unit (5G CU/DU) conforming to radio units (RUs) and O-RAN open interface specifications.
• In December 2020, Futijsu announced that KDDI Corporation selected Fujitsu’s O-RAN compatible 5G Radio Unit for the construction of a virtualized base station for 5G commercial services in Japan.
• In November 2021, Nokia got selected by Chubu Telecommunications Co., Inc, which is a subsidiary of KDDI, to conduct a 5G Sub-6GHz standalone trial in Japan. The trial will utilize a local 5G network and the Sub-6GHz (n79) 4.6-4.9 spectrum band for enhanced capacity.

Market Segmentation:

The Japan 5G base station equipment market has been analyzed through the following segments:

By Deployment

• Urban
• Rural

By Equipment Type

• Central Unit
• Distributed Unit
• Radio Unit

By Technology

• O-RAN
• Traditional RAN

By Configuration

• Standalone
• Non-Standalone

By Frequency Band

• 3.7 GHz and 4.5 GHz Bands
• 28 GHz Band