Japan 5G Crisis: Why NEC Just Quit the Race (And What It Means for You)
Japanese Telecom Giant Exits 5G Battle as Coverage Hits 98%—But Hidden Gaps Tell a Different Story
Japan 5G network just reached a milestone that should signal triumph. With 98.4% population coverage by the end of 2024, the country appears to have conquered next-generation wireless connectivity. Yet behind these impressive numbers, a major telecom equipment maker just threw in the towel. NEC’s decision to abandon 4G and 5G base station development exposes cracks in Japan telecom foundation that numbers alone can’t hide.
The contradiction is stark. While Japan celebrates near-universal 5G availability, one of its key domestic players walks away from the market entirely. This isn’t just a corporate setback—it’s a warning signal about deeper problems in how Japan telecommunications industry competes on the global stage.
The Market Reality That Forced NEC’s Hand
NEC’s exit from the 5G market wasn’t a sudden decision. Market forces have been squeezing Japanese telecom equipment makers for years. The numbers paint a brutal picture: Chinese giant Huawei Technologies, Sweden’s Ericsson, and Finland’s Nokia control nearly 80% of the global market for 4G and 5G base stations. Meanwhile, Japanese companies NEC and Fujitsu cling to less than 2% combined market share.
Modern telecom equipment demands massive scale. Companies need enormous sales volumes to spread development costs across research, manufacturing, and market promotion. Without that scale, losses pile up quickly. NEC couldn’t achieve the critical mass needed to compete with global leaders who operate in dozens of countries simultaneously.
The company hasn’t completely abandoned wireless technology. NEC announced it will pivot toward 6G development, betting on next-generation standards to leapfrog its current disadvantages. But industry experts question whether this strategy can succeed where 5G efforts failed.
Coverage Numbers Hide a Fragmented User Experience
Japan official 5G coverage figure of 98.4% sounds impressive until you examine how people actually use these networks. Data from Ookla’s Speedtest Intelligence reveals a massive gap between technical availability and real-world access.
5G availability—which measures how often users with 5G-capable devices actually connect to 5G networks—varies wildly across Japan four major carriers. NTT DOCOMO leads with 38.4% availability. SoftBank lags at just 26.5%, despite delivering the fastest overall median speeds at 62.05 Mbps.
Osaka prefecture recorded the highest 5G availability at 35.2%. Users in this densely populated region connect to 5G networks more than three times as often as those in Yamanashi, where availability drops to just 9.1%. This massive disparity exposes how operators prioritize profitable urban markets while rural areas get left behind.
Urban Speed vs. Rural Stagnation
Japan population concentration in cities drives this digital divide. More than 92% of Japanese residents live in urban areas, giving operators clear incentives to focus 5G investment where user density is highest. Osaka combines 35.2% 5G availability with median download speeds of 172 Mbps. Tokyo follows closely with 33.7% availability and 128 Mbps speeds.
Some rural prefectures break the expected patterns. Yamagata recorded Japan fastest median 5G speed at 181 Mbps despite relatively low availability at 13.9%. Low user density in these areas means less network congestion, allowing faster speeds for the few users who do connect to 5G. But these speed wins can’t compensate for the fundamental access gap.
Operators face tough economics in rural deployment. Spectrum licenses from the Ministry of Internal Affairs and Communications require coverage in all 47 prefectures, including mountainous regions where infrastructure costs soar. Many carriers meet these requirements by maintaining 4G networks rather than investing in expensive 5G buildouts that serve fewer users.
The 6G Gambit: Can Japan Leapfrog Its Way Back?
Japan launched its Beyond 5G Promotion Strategy in 2020, setting ambitious targets for 6G development. The roadmap calls for establishing key technologies starting in 2025 and deploying Beyond 5G communication services by 2030. On paper, this looks like a smart way to skip ahead while competitors focus on optimizing 5G networks.
Reality presents bigger challenges. Industry experts warn that Japan weak 5G foundation could undermine its 6G ambitions. Ultra-high-frequency spectrums allocated for 6G travel only in straight lines over very short distances. This requires vastly denser base station deployment than 5G already demands—a massive infrastructure investment that becomes even more difficult with inadequate 5G networks as a foundation.
Technology reserves raise additional concerns. Japanese companies hold just 9.9% of global 6G patent applications, according to research from Nikkei and Cyber Creative Institute. China, the United States, and European nations dominate the intellectual property landscape for next-generation wireless technology.
Political Coalitions Can’t Fix Industrial Problems
Japan recently hosted a closed-door meeting of the Global Coalition on Telecommunications (GCOT) in Tokyo, bringing together officials from Australia, Canada, the UK, and the United States. While officially focused on artificial intelligence and 6G standards cooperation, media outlets interpreted the gathering as an effort to counter China’s telecommunications dominance.
These political alliances face fundamental economic barriers. Japan lacks a sufficiently large and unified internal market to incubate technologies and achieve economies of scale. The country’s 125 million people can’t provide the market foundation that Chinese companies access domestically or that European firms achieve through regional integration.
Geopolitical considerations also fragment the global market, increasing development costs and reducing network interoperability. The history of 4G and 5G deployment demonstrates that successful technologies emerge from widespread market demand, open cooperation, and extensive market testing—not from politically motivated alliances.
What This Means for Japanese Consumers and Businesses
Japanese mobile users face a bifurcated reality. Those in major cities enjoy excellent 5G access with competitive speeds across multiple carriers. SoftBank leads overall median speeds. Rakuten Mobile delivers the fastest 5G download speeds at 128.39 Mbps. NTT DOCOMO provides the most consistent 5G availability.
Users in rural and mountainous regions experience dramatically different service. They spend most of their time on 4G networks, which remain highly reliable with availability above 97% across all carriers. But they miss out on 5G’s enhanced capabilities for emerging applications in healthcare, education, and industrial automation.
Businesses planning technology deployments must account for these regional variations. A manufacturing facility in rural Yamanashi can’t depend on 5G connectivity the same way a Tokyo office can. This geographic disparity could slow adoption of advanced applications that require consistent high-speed wireless access.
The corporate landscape faces restructuring as well. NEC’s exit from base station development eliminates a domestic alternative for Japanese carriers. They now depend almost entirely on foreign suppliers—primarily Chinese and European manufacturers. This raises strategic concerns about supply chain resilience and technology independence.
The Path Forward Requires Massive Investment
Closing Japan 5G gaps demands continued targeted investment in regions that operators have deprioritized. The government’s licensing requirements create coverage mandates, but they don’t guarantee service quality or user access. Bridging the urban-rural divide requires billions in infrastructure spending with uncertain returns.
Japan telecommunications ministry faces difficult policy choices. Stricter service quality requirements could force operators to improve rural 5G deployment. But overly aggressive mandates risk making rural service economically unviable, potentially leading carriers to exit markets entirely or seek government subsidies.
The 6G timeline adds pressure to these decisions. If Japan intends to compete effectively in next-generation wireless standards, it needs a robust 5G foundation. Current deployment patterns suggest the country risks entering the 6G era with persistent infrastructure gaps that could hamper advanced applications and industrial competitiveness.
NEC’s withdrawal serves as a stark reminder that technical standards and political aspirations don’t guarantee market success. Japan achieved impressive 5G coverage numbers through regulatory requirements and sustained spending. But translating coverage into actual user access and maintaining domestic industrial capacity requires scale and competitive advantage that Japan fragmented market struggles to provide.
The coming years will test whether Japan 6G ambitions can overcome the structural challenges that undermined its 5G equipment makers. For now, Japanese consumers and businesses must navigate a 5G landscape where impressive national statistics mask persistent local gaps and dwindling domestic alternatives.
FAQ: Japan 5G Network Coverage and Development
Why did NEC stop making 5G equipment in Japan?
NEC exited the 5G base station market because Japanese companies hold less than 2% of the global telecom equipment market share. Chinese and European competitors like Huawei, Ericsson, and Nokia dominate with nearly 80% market control. Without sufficient sales volume to cover massive development and manufacturing costs, NEC’s 5G business operated at a loss. The company now focuses on 6G development instead, hoping to gain competitive advantage in next-generation technology before global standards solidify.
Does Japan really have 98% 5G coverage across the country?
Japan achieved 98.4% population coverage by the end of fiscal year 2024, but this figure measures technical availability rather than actual use. Real-world 5G availability—how often users with 5G devices actually connect to 5G networks—varies dramatically by location and carrier. Urban centers like Osaka reach 35.2% availability, while rural areas like Yamanashi drop to just 9.1%. Most Japanese users still spend the majority of their time on reliable 4G networks, which maintain over 97% availability nationwide.
Which mobile carrier offers the best 5G service in Japan?
The answer depends on your priorities and location. SoftBank delivers the fastest overall median speeds at 62.05 Mbps across all network types. Rakuten Mobile provides the fastest pure 5G download speeds at 128.39 Mbps. NTT DOCOMO offers the highest 5G availability at 38.4%, meaning users connect to 5G networks most frequently. KDDI’s au network balances consistent performance with competitive speeds. Urban users enjoy strong service from all carriers, while rural users face significant gaps regardless of provider.
Can Japan compete in 6G development without strong 5G infrastructure?
Industry experts express serious concerns about Japan 6G strategy. The country holds only 9.9% of global 6G patent applications, far behind China, the United States, and Europe. More critically, 6G networks require ultra-high-frequency spectrums that travel only short distances in straight lines. This demands much denser base station deployment than 5G—a challenge that becomes harder with Japan current infrastructure gaps. Without addressing underlying market scale problems and inadequate 5G foundations, Japan 6G ambitions face steep obstacles despite government promotion strategies.
