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Quantifying the satellite smartphone opportunity in Japan

With the iPhone 14 launch smartphone satellite connectivity has now arrived in some global markets, and will likely arrive soon in others, like Japan. But the extent of the opportunity for services beyond emergency communications, such as two way messaging and regular Internet connectivity, is uncertain especially in advanced markets like Japan with strong mobile networks.

Japanese smartphone users have the third best “no signal” time globally in Opensignal’s new analysis with just 0.41% of time without available mobile services. There is no market outside Asia where users have cellular connectivity more often than do our Japanese users. Globally, South Korean users see the smallest amount of time without service (0.22% of the time). Despite Japan’s strong performance, across Japan there remains a need for satellite connectivity to fill in gaps in mobile service.

Smartphone satellite connectivity is a very new service with many leading industry players making moves. In September 2022, Apple announced emergency messaging via satellite for the iPhone 14 range, and that it would be a standard feature in North America. Since then, Apple has expanded the service to a further four markets in Europe, and it will likely expand to further markets soon perhaps including Japan which is a strong market for iPhone.

Other satellite smartphone services soon to launch include Bullitt group and Mediatek; Huawei with Beidou in China; and Qualcomm announcing it would enable two way messaging using Iridium satellite connectivity on smartphones powered by its Snapdragon 8 Gen 2 chipset in the second half of 2023, although initially only for models sold in North America or Europe (although global satellite service will be enabled for those users, indicating Qualcomm has the technical capability to expand where its service could be sold).

In Japan, all four operators are already engaged with satellite partners but in different areas. Rakuten has obtained licenses to test smartphone satellite connectivity with AST SpaceMobile. SoftBank is working with Skylo Technologies, but on Internet of Things (IoT) projects rather than smartphones. Also, SoftBank has an agreement to promote OneWeb’s satellite services. KDDI has a Starlink relationship, although initially it is for satellite backhaul for base stations. Similarly, NTT docomo is working with Airbus and SKY Perfect JSAT on a radio access network (RAN) solution using satellite. With so many players moving in the smartphone satellite area globally, Japan’s operators will be assessing potential new services.

While Japanese smartphone users spend the vast majority of time with a mobile signal, there are differences across the country. In Hokkaido, users spend 0.7% of time without a signal compared with 0.42% in Chubu and Chugoku. While these figures may look low, if that time without a signal is when an important business call needs to be made, or a call for emergency assistance then the value of having satellite connectivity is immense.

Dedicated satellite phones do not offer the same benefit as having satellite connectivity on a normal smartphone, although Japan’s mobile operators do sell these devices (e.g. SoftBank, NTT docomo), because a satellite phone requires a user to have made a conscious decision upfront to buy the device and pay for the service. But having the capability as standard on a smartphone means that when it’s needed, the satellite connection is available for many more people.

The mountainous and more remote parts of Japan are not the only locations where users may lack a mobile signal. Even in cities users may experience times where there is no cellular service available. In part, this reflects the geography of each urban area — some are compact while others are spread over a wider area encompassing hills or other obstacles.

Dense urban buildings can also block mobile signals which likely explains why users see more time without a signal in Tokyo (0.52%) than in nearby Sagamihara (0.26%) or Kawaguchi (0.18%). However, in those buildings satellite signals will also not reach — current smartphone satellite services need a clear view of the sky and some seconds to establish a connection. In these, Wi-Fi connectivity, or improving cellular service through in-building antennas is a better solution to users’ challenges than satellite.

Regardless, Japan’s operators should now assess how to approach smartphone satellite services. Whether they should partner with some of the players involved in announcements to date, expand on their existing relationships for RAN backhaul or IoT to launch their own offering. Or, even whether to seek to expand the reach of their cellular networks in rural areas through more site acquisition or further network sharing agreements. Real-world data on the extent of users’ current challenges today can guide these decisions.