StagePIPE - II | IPO
JTOWER (TYO: 4485) develops, designs, and constructs mobile telecommunication networks to provide in-building mobile infrastructure sharing services. The company also develops, designs, and provides information platform services.
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Latest JTOWER News
Mar 7, 2023
Digital Infrastructure (Fibre, Telecom Towers, Data Centres, Submarine Cables) Telecom Tower Market Analysis and Forecast Thematics / Opportunities relating to 5G, M&A and e-Commerce Telco M&A Transaction Database Japan Telecoms Industry Report at a Glance Globally, the telecommunications sector is proving to be a core and essential infrastructure service to national economies, with data infrastructure becoming critical in a connected world and will likely increasingly attract a new class of investors such as large infrastructure funds. The publisher expects the Japanese telecommunications industry to remain steady thanks to the defensiveness nature of the industry, amid the political uncertainties and an uncertain economic outlook due to rising inflation. The Japanese telecommunications market is the third-largest market in the world by revenue (USD138 billion) with three large fixed and mobile network operators that invested heavily in towers and fibre infrastructure over the past two decades despite an overall market underpinned by low economic and population growth. Growing mobile phone penetration and high fixed broadband take-up among households will fuel future growth over the next five years. Following the market expansion over the last 5 years, the publisher forecasts subdued revenue growth growing to 2028, the diminishing impact of declining legacy voice and SMS revenue, Rakuten market entry and population decline. The strategic and economic competition between Japan and China is at the centre of advanced technology competition and the future of global data and communications. For most developed countries in the region, gaining strategic and economic power depends heavily on having technological ascendancy, especially in data and communications. Capex Investments The Capex from Japanese operators is cyclical with mobile rollout leading to investments in line with the operators' top-line growth. Capex investments peaked in 2021 while all three operators built their respective 5G mobile networks. Capex will continue growing from 2024 through to 2028, as mobile operators invest in 5G.Japan sees 5G as the backbone of a wide range of technological advances including autonomous vehicles, smart cities and Internet of Things.All three mobile operators launched 5G services in March 2020.The Capex to GDP ratio will grow slighly during the forecast peior to 2028. The analyst projects an increase in Capex spend throughout 2022 alone by installing more 5G base stations across all cities, ramping up Japan's 5G rollout nationwide and consolidating its 5G network leadership in terms of subscribers and availability in the country. Operator Profiles The Japanese three-player mobile market is a remarkably stable market, however it is about to be rocked by fourth market entrant - Rakuten Mobile - looking tofollow the steps of successful new entrants launch such as Free in France and Reliance Jio in India. Rakuten has set an ambitious target of being the first cloud-native mobile network. Between 2015 and 2021, both NTT lost revenue and EBITDA share to KDDI and Softbank over the last six years, Softbank lost some EBITDA share while cost reduction measures started to flow in 2019 with improving EBITDA and cash flow. Mobile Subscribers and Revenue Average annual mobile revenue growth was lower (1.5%) than mobile service subscriptions growth (4.6%) during the period 2014-2019, highlighting the structural challenges faced by mobile operators. Declining voice & SMS revenue only partially offset by wireless data monetisation is putting pressure on ARPU, compounded by bundling discounts to stem churn. IoT connections is a major growth driver for mobile operators, a slowdown in mobile subscriptions growth will put long term pressure, dialling up competition for the three mobile operators fighting for fewer new customers. According to our benchmark study of mobile data pricing, Japan had among the biggest cost reduction per GB over the last 3 years, while India has the lowest rate in the world with just a few cents per GB. Many operators are looking to Rakuten Mobile's trailblazing strategy of deploying its network using a cloud-native mobile network blueprint to lower its rollout costs. The traditional telecommunications model is becoming increasingly hard to sustain amidst declining operating margins and continued expectations for cheaper services and more value inclusion. The analyst forecasts Rakuten could capture up to 10m subscribers in 3 years by offering lower pricing, e-Commerce bundling and other lifestyle services to its existing 100 million Rakuten customers, while KDDI and to a lesser extent NTT and Softbank already embarked on such journey. The analyst forecasts 5G mobile subscribers will represent nearly 75% subscribers of all subscriptions by 2028, 4G will represent about 25% of all connections while 3G will be shut down by the end of 2026. Broadband Subscribers - FTTH Push to Gigabit Speeds After over 20 years of investments in fibre infrastructure, Japan boasts one of the highest FTTH penetration in the world as well as one of the most advanced, consumer broadband products offering speeds up to 10Gbps. However, most people use 100Mbps packages which are mostly bundled with mobile services by the three dominant players, NTT, KDDI and Softbank. Fixed broadband penetration is forecasted to grow modestly as Japan's investments in full-fibre networks are now reaching maturity with affordable packages and increased broadband household penetration growing towards saturation. Thematics-Telecoms Infrastructure / 5G / M&A / Infrastructure Infrastructure funds, pension funds and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks. The Japan Telecoms Industry Reporttransactions database analysis highlightsthe dearth of inbound (domestic) transactions in the Japanese telecommunications services market, with the largest transactions from Softbank entering the mobile market and consolidating its position by acquiring smaller operators. However, in the short to medium term, the mobile telco sector is unlikely to experience corporate activity with Rakuten market entry. Softbank Group is selling down shares of its mobile arm to raise cash and fortify its ailing balance sheet with the group still owning about 40% of its mobile unit. The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline. Reasons to Buy this Report Benefit from the latest market opportunities Understand the threats to your operations and investments and protect your company against future risks Gain insights on emerging trends supporting, enhancing or disrupting your activities in the market Get a full view of the competitive landscape to assess your market position. Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market Target business opportunities and risks in the telecoms sectorthrough our reviews of latest industry trends, regulatory changes and major deals, projects and investments Assess the activities, strategy and market position of your competitors, partners and clientsvia our Operators Profiles The Japan Telecommunications Industry Report, 2023-2028 includes a comprehensive review of the Japanese market dynamics, market sizing, market forecasts, analysis, insights and key trends. Companies Mentioned
JTOWER Frequently Asked Questions (FAQ)
When was JTOWER founded?
JTOWER was founded in 2012.
Where is JTOWER's headquarters?
JTOWER's headquarters is located at Eastern AOYAMA Bldg. 2F, Tokyo.
What is JTOWER's latest funding round?
JTOWER's latest funding round is PIPE - II.
How much did JTOWER raise?
JTOWER raised a total of $60.38M.
Who are the investors of JTOWER?
Investors of JTOWER include NTT DoCoMo, Rakuten Mobile, Innovation Network Corporation of Japan, Japan Post Capital, Mizuho Capital and 7 more.
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