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5G networks

Japan's carriers plan $14bn spending blitz for nationwide 5G

Four players agree to make rural investments amid fears of industry price war

Japan's mobile operators have set aside $14 billion to invest in 5G networks over five years. (Photo by Ken Kobayashi)

TOKYO -- Japan's government on Wednesday approved plans by four mobile network operators to build superfast fifth-generation wireless networks, with investment set to total 1.6 trillion yen ($14.4 billion) over the next five years.

Applications submitted by NTT Docomo, KDDI, SoftBank and Rakuten were approved by the communications ministry. E-commerce group Rakuten is a newcomer that plans to begin 4G services in October.

Docomo and KDDI plan to invest a minimum of 795 billion yen and 466 billion yen, respectively, in 5G. SoftBank has earmarked 206 billion yen, while Rakuten plans 194 billion yen.

All four providers plan to begin commercial 5G services in 2020, later than the U.S. and South Korea, where 5G networks launched last week.

The government wants industry to build out 5G infrastructure widely, from big metropolitan areas to rural regions. It expects the technology, which offers speeds up to 100 times as fast as 4G, to enable self-driving buses and telemedicine, and to help Japan combat its worker shortage.

The conditions required for receiving 5G spectrum included starting services in every prefecture within two years. The communications ministry also divided Japan into 4,500 blocks, requiring operators to set up base stations in at least half of them within five years. Docomo and KDDI each plan to achieve coverage of more than 90% in that time. SoftBank and Rakuten set less ambitious goals, at 64% and 56%, respectively.

The requirement will force mobile operators to balance making heavy investments with attaining profits.

The government is already pressing the carriers to cut their service rates. And the entrance of Rakuten, which aims for 15 million subscribers, is expected to intensify price competition.

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