Two M&A transactions in 2024 sent shockwaves to Japan’s heavily dominated MNO tower market, which is approximately 97% owned by MNOs NTT DOCOMO, KDDI, Softbank, and Rakuten Mobile. Japan’s sole independent tower company, JTOWER, accepted an offer from digital infrastructure investor DigitalBridge in August 2024 to acquire the company, pending shareholder approval.
DigitalBridge’s acquisition of JTOWER is likely to propel the shared infrastructure operating model that JTOWER has long sought to implement in the country. Meanwhile, just a little earlier during the month, Japanese MNO Rakuten Group and Macquarie Asset Management signed a sale and leaseback transaction covering a portion of Rakuten’s mobile assets in Japan. It is believed that Rakuten will continue to manage its estimated footprint of 5,280 towers, with the ownership of the towers reverting at the end of the financing term. Digital infrastructure asset investors have recently been taking a keen eye on Japan, and it is apparent why.
Japan - telecom market statistics Q3 2024
Japan is one of the world’s most advanced mobile markets in term of 5G rollout, with four MNOs operating – namely DOCOMO, KDDI, SoftBank and new market entrant Rakuten (Rakuten’s network being based upon Open RAN technology). Rakuten reported record losses as a result of heavy network rollout costs but has vowed to increase network investment by 30-40% as it looks to grow its subscriber base and compete with the country’s established players.
Calls by Japan’s Prime Minister to reduce mobile fees is expected to intensify competition further. In a bid to reduce prices, the government has published guidelines around infrastructure sharing, of which there has been little to date.
Despite having previously mainly focused on indoor sites due to the aforementioned reluctance to share on towers, JTower acquired 71 towers from NTT in July 2021 for an undisclosed sum. In March 2022, JTower entered into a master transaction agreement to transfer a further 6,002 towers for a sum of US$869.6 million. The first 555 of these sites were transferred to JTower in early 2023.
Japan estimated tower count Q3 2024
