IDC Japan, an IT research company, has released the latest survey results on the local 5G market in Japan. Local 5G refers to communication systems that enterprises or local governments can independently build and operate 5G networks in specific locations or regions.

IDC predicts that by 2029, the size of Japan’s local 5G market will reach 86.7 billion yen, with an expected compound annual growth rate of 39.3% between 2024 and 2029. This market includes expenses for local 5G compatible devices, local 5G infrastructure, and IT related applications invested together with local 5G.

The market is moving from verification to commercial deployment

Between 2024 and 2025, there will be an increase in commercial deployment of local 5G. Japanese domestic suppliers see it as a turning point in the market. Although there are still many concept validation projects, the number of projects based on commercial use is increasing. IDC predicts that the commercial deployment of 5G in Japan’s local market will further advance in the future, and the market is expected to achieve rapid growth.

Of particular note is the application in entertainment facilities, such as sports stadiums and race tracks. The wireless nature of cameras makes it possible for new camera techniques to create image value from different positions and angles than traditional methods, and attempts to achieve profitability are increasing. IDC believes that this may become an effective form in the 5G field, which has long been considered to lack killer applications. At the same time, in the industrial field, with the advancement of digital transformation and the intensification of manpower shortage, the demand for remote monitoring and mechanical remote control to achieve a safe and comfortable working environment is constantly increasing, and the introduction of local 5G is steadily expanding.

Enterprise demand shifts towards high-performance wireless technology

Yoko Ono, Infrastructure and Equipment Research Manager at IDC Japan, said, “Companies that introduced low-cost wireless communication technologies such as wireless LAN in industrial sites a few years ago are paying increasing attention to local 5G. These enterprises have already understood the advantages and disadvantages of wireless technology, and as applications become more advanced, they are beginning to seek higher quality and higher performance wireless technologies. Local 5G should target these enterprises as customers.”