Japan Technology Industry (Bianca Nenciu)

Japan has a substantial information technology (IT) industry. As of 2020, the software business alone
accounted for about 16.7 trillion Japanese yen in sales. During the same year, the data processing and
information service business produced about eight trillion yen in revenue.
Japan ICT Market Analysis
Japan is home to dominant ICT companies such as Sony, Panasonic, Fujitsu, NEC, and Toshiba,
which is substantially contributing to Japan's growth as a major ICT hub.
The Japanese ICT market is divided into four categories: hardware, software, IT services, and
telecommunications services.
Telecommunication
Japan has a highly developed infrastructure that allows its residents to be constantly linked to one
another. In fiscal year 2020, the telecommunications industry made revenues of around 15.2 trillion
Japanese yen, with mobile communications accounting for more over half of total sales. Japan has a
high internet penetration rate as well as a big number of mobile internet users, reflecting the rising
usage of smartphones in the 2010s. While smartphone penetration is currently high, the proportion of
individuals who use smartphones is anticipated to rise even more in the coming years.
Market Leaders
Nippon Telegraph and Telephone Corporation.
KDDI Corporation.
SoftBank
Source:

1. Nippon Telegraph and Telephone Corporation

NTT Communications is the leading global provider of information and communications technology
(ICT) solutions within NTT Group which ranks in the top 100 of the Fortune Global 500.
Financial Highlights

■Profit and loss

Unit 2020.3 2021.3 2022.3
Operating revenues Billin of yen 11,899.4 11,944.0 12,156.4
Operating expenses Billin of yen 10,337.3 10,272.6 10,387.9
Operating profit Billin of yen 1,562.2 1,671.4 1,768.6
Profit attributable to NTT Billin of yen 855.3 916.2 1,181.1

■Statement of Finansial Position

Unit 2020.3 2021.3 2022.3

Total assets Billin of yen 23,014.1 22,965.5 23,862.2
Non-current assets Billin of yen 11,551.5 14,762.4 14,844.1
Shareholders’ equity Billin of yen 9,061.1 7,562.7 82,825.0
Interest-bearing debt Billin of yen 4,699.9 7,624.3 73,643.0
*1
D/E ratio % 51.9% 100.8% 88.9%

■Cash flows

Unit 2020.3 2021.3 2022.3

Cash flows from operating activities Billin of yen 2,995.2 3,009.1 3,010.3
Cash flows from investing activities Billin of yen -1,852.7 -1,424.5 -1,699.2
Cash flows from financing activities Billin of yen -1,041.3 -1,689.5 -1,438.1
*2
Free cash flows Billin of yen 1,142.5 1,584.5 1,311.1
■Main management Indexes

Unit 2020.3 2021.3 2022.3

*3*4*5
EPS Yen 231 248 329
*6
Overseas Operating Income Margin % 2.4% 3.0% 6.3%
*7
Cost Reductions Billion of yen -500.0 -670.0 -840.0
ROIC % 6.6% 7.2% 7.5%
*8
Capex to Sales(Domestic Network Business ) % 13.8% 13.6% 13.1%
*5
Cash dividends, applicable to earnings for the year Yen 95 105 115
Dividend payout ratio % 41.1% 42.3% 34.9%
*9
ROE % 9.3% 11.0% 14.9%
*10
ROA % 6.9% 7.2% 7.7%

■Capital investment, Depreciation, EBITDA, EBITDA margin

Unit 2020.3 2021.3 2022.3

Capital investment Billin of yen 1,806.6 1,728.3 1,687.6
Depreciation Billin of yen 1,465.3 1,507.2 1,561.2
*11
EBITDA Billin of yen 2,968.6 3,111.6 3,247.1
*11*12*13
EBITDA margin % 24.9% 26.1% 26.7%

Information by segment
Number of subscribers
Unit 2020.3 2021.3 2022.3
Mobilephone(including Xi) *1 Thousands of subscriptions 80,326 82,632 84,752
(including)Xi Thousands of subscriptions 61,664 64,210 61,396
*2
FLET'S Hikari(including Hikari Collaboration Model) Thousands of subscriptions 21,658 22,564 23,266
(including)Hikari Collaboration Model Thousands of subscriptions 13,888 15,245 16,292
Hikari Denwa*3 Thousands of channels 18,503 18,692 18,782
Telephone subscriber line + INS-Net *4 *5 Thousands of subscriptions 17,085 15,869 14,727

Source: https://group.ntt/en/ir/fin/highlight.html
Financial comparison between TTKOM AND NTT (Billion of dollars)
Graphs source: https://finbox.com/

Japan Defense Market Trends

Japan is one of the top 10 countries globally in terms of defense spending. According to the
Stockholm International Peace and Research Institute, the Japanese government spends USD 54.1
billion on its defense sector which showed a growth of 7.3 percent from the previous year.

Japan Defense Market Leaders

Kawasaki Heavy Industries, Ltd.
Mitsubishi Heavy Industries, Ltd.
ShinMaywa Industries, Ltd.

Source: https://www.mordorintelligence.com/industry-reports/japan-defense-market
Turkey Aerospace & Defense Market Analysis
Turkey's aerospace and military sector is anticipated to expand with a CAGR of more than 5% over
the course of the projection period. After Saudi Arabia and Israel, Turkey is the Middle East country
that spends the most on military, spending USD 15.5 billion in 2021. The nation dedicates more than
2% of its GDP to the armed forces.
Source: https://www.mordorintelligence.com/industry-reports/aerospace-and-defense-industry-
of-turkey

IT
The Japanese ICT market is anticipated to record a CAGR of 11.25% over the forecast period. The
growing emphasis on digital technology, AI, robotics, cyber security, and healthcare IT is driving the
growth of the market.
Market Leaders
Fujitsu Limited
IBM Japan Ltd
NEC Corporation

Significant players in the market are providing enhanced cloud services in order to meet the rising
demand for cloud infrastructure in the IT sector.
Moreover, the introduction of the 6G system is expected to exceed the performance of 5G and
simultaneously provide high-speed, large capacity, and low latency capabilities, use new high-
frequency bands, expand communication coverage in the sky, at sea, and in space, and enable both
ultra-low-power consumption and low-cost communications.
In June 2022, Japanese telecom equipment manufacturers NEC and Fujitsu, and Nokia collaborated to
conduct experimental trials of new mobile communications technologies for the targeted commercial
launch of 6G services by 2030.
According to METI (Japan), in 2020, the volume of private investment in the Japanese information
technology (IT) sector was around JPY13 trillion. The market is expected to grow further and reach
approximately JPY13.9 in the next few years.
Source: https://www.mordorintelligence.com/industry-reports/japan-ict-market

Turkey ICT
Market Leaders
IBM Corporation
Microsoft
Cisco Systems, Inc.

For the forecast period, the Turkey ICT Market is predicted to expand at a CAGR of 9.3%. Spending
on software and services remained strong, and cloud computing expanded significantly in numerous
countries. The key industries contributing the most to the sales of traditional IT services are systems
integration, consulting, and computer programming.
In the fintech business, artificial intelligence is used to perform a variety of functions such as fraud
detection, loan decision-making, credit risk assessment, customer support, wealth management,
insurance, and so on. Turkish financial companies are quickly implementing AI to increase efficiency,
improve precision, and deliver quick query resolution.
Additional factors driving the market growth include the rising need for data-driven technologies like
artificial intelligence (AI) and the Internet of Things and the expanding usage of microservice-based
software development across various industrial sectors (IoT).
Last year, Turkey had the highest scoring section, with an e-infrastructure rating of 0.76 out of one.
On the other side, the nation's internet affordability score was merely 0.08.
Source: https://www.mordorintelligence.com/industry-reports/turkey-ict-market