Telecommunication Equipment Production and Trade Figures For FY2008 (April - March)

<June 10, 2009>

  The Communication and Information network Association of Japan (CIAJ) announces the telecommunication equipment and trade figures for FY2008 April through March) as follows.
  With the Lehman-shock in mid-September, 2008, the Japanese economy in FY2008 was immediately engulfed by the following downward spiral of the global economy, witnessing the largest negative growth in post-war history.
  The telecommunication equipment market was not immune to these economic forces, and together with the rapid drop in demand resulting from the switch to the new system for handset sales, the industry marked an unprecedented 29.8% decline over the previous year. In network equipment, expansion of NGN service areas and investment in infrastructure to keep up with exponential growth in traffic kept the impact from the overall economy to a minimum, but still recorded a negative growth of 7.6% over the previous year. Domestic production was 1.917 trillion yen, or a negative growth of 23.6% over the previous year. The total value of exports was 672.1 billion yen (- 19.8% over FY2007) and the total value of imports was 1.005 trillion yen (- 9.0% over FY2007).

The total value of production in FY2008 was 1.917 trillion yen (negative growth of 23.6% over the previous year), resulting in the third consecutive negative growth for the fiscal year.

[By categories]

Wireline terminal equipment	111.7 billion yen	(-20.9% over FY2007)
Mobile terminal equipment of which:	1.154 trillion yen	(-30.5% over FY2007)
Cellular phones	1.058 trillion yen	(-31.6% over FY2007)
Public-use PHS	29.6 billion yen	(-38.0% over FY2007)
Wireline network equipment of which:	405.9 billion yen	(-1.3% over FY2007)
Switching systems	122.5 billion yen	(-13.9% over FY2007)
Transmission equipment	283.4 billion yen	(-5.4% over FY2007)
Wireless network equipment of which:	194.8 billion yen	(-17.7% over FY2007)
Fixed telecommunication devices	122.7 billion yen	(-17.4% over FY2007)
Network access equipment	35.4 billion yen	(-11.7% over FY2007)
Wireline parts	15.3 billion yen	(-20.0% over FY2007)

<<Noteworthy developments in 2008>>

• The break down of wireline terminal equipment is as follows: telephone sets 11.4 billion yen (-19.5% over FY2007), applied telephone devices 80.5 billion yen (-22.0% over FY2007), telegraph & imaging devices 19.8 billion yen (-16.7% over FY2007). In addition to the impact from the economic downturn, the wireline terminal equipment market itself shrank in FY2008.
• A large drop in demand for cellular handsets was forecast with the impact from the new system for handset sales, but this was further aggravated by the economy. The public-use PHS figure of 29.6 billion yen was also a large drop due to the slowing of handset purchases in conjunction with switching carriers, which peaked in FY2007.
• Switching system investment was held to a minimum for maintaining status quo and maintenance purposes.
• Transmission equipment, including optical transmission equipment, showed positive growth helped by healthy investment for NGN expansion of service areas.
• Fixed telecommunication devices experienced the counter-reaction from heavy investment the previous 2 years in emergency and prevention systems. Base stations showed negative growth for the second consecutive year with the completion of MNP-related area expansion in FY2006.
• The negative growth of network access equipment, in particular, the 31.8 billion yen, or -10% growth for routers and hubs over FY2007 figures is likely the result of withholding IP network expansion-related investments for improving network reliability, enhancing functions and strengthening security due to the economic downturn.
• Wireline parts showed a large drop in demand (- 20% over FY2007) to 15.3 billion yen, due to the impact of the global economic crisis.

Telephone sets and terminal equipment	36.3 billion yen	(-44.9%over FY2007)
Cellular phones	20.4 billion yen	(-56.8% over FY2007)
Facsimiles	6.2 billion yen	(+14.2% over FY2007)
Cordless handsets for landline phones	1.7 billion yen	(-29.0% over FY2007)
Other	8.0 billion yen	(-26.3% over FY2007)
Network equipment	210.3 billion yen	(+2.7% over FY2007)
Base stations	59.4 billion yen	(-24.5% over FY2007)
Data communication equipment	144.9 billion yen	(+21.8% over FY2007)
Other network equipment	6.0 billion yen	(-16.7% over FY2007)
Parts	425.5 billion yen	(-25.0% over FY2007)

The large drop in figures for telephone sets and terminal equipment resulted in negative 44.9% growth over FY2007 for the category. However, network equipment recorded a positive growth of 2.7% over FY2007 with the healthy performance of data communications equipment. The latter half of FY2008 more fully reflected the impact of the global economic downturn from September 2008.

The total figure for imports in FY2007 was 1.005 trillion yen (-9.0% over FY2007).

Telephone sets and terminal equipment	239.4 billion yen	(+0.9% over FY2007)
Cellular phones	212.7 billion yen	(+6.9% over FY2007)
Facsimiles	11.0 billion yen	(-28.8% over FY2007)
Cordless handsets for landline phones	6.6 billion yen	(-30.1% over FY2007)
Other	9.2 billion yen	(-30.8% over FY2007)
Network equipment	392.7 billion yen	(-9.6% over FY2007)
Base stations	39.0 billion yen	(-18.2% over FY2007)
Data communication equipment	330.8 billion yen	(-6.4% over FY2007)
Other network equipment	23.0 billion yen	(-31.9% over FY2007)
Parts	373.1 billion yen	(-13.8% over FY2007)

The telephone sets and terminal equipment figure was pushed into positive 0.9% growth with growth in cellular phones, but the network equipment category figure was -9.6% over FY2007, weighed down by base stations and data communications equipment categories. Parts also showed negative growth of 13.8 % over FY2007. The latter half of FY2008 more fully reflected the impact of the global economic downturn from September 2008.

For details, contact:
Mr. Kenmotsu
Market Research
CIAJ
tel: 81-3-5403-9356  fax: 81-3-5403-9360  e-mail: kenmotsu[at]ciaj.or.jp

For more general inquiries, contact:
Mr. Mano
Corporate Communication
CIAJ
tel: 81-3-5403-9351  fax: 81-3-5403-9360 e-mail: mano[at]ciaj.or.jp