A rapid growth is seen in the broadband services market in Japan, with the subscriber base reaching 15 million by the end of March, 2004, and that of IP-VPN, like e-VLAN, jumped to exceed 250,000 and 120,000 lines respectively. In 2007, the ADSL services are expected to compete with the Fibre to The Floor (FTTF) which is likely to account for more than 50% of all broadband network services by the end of 2008 once it moves into the mainstream,.

The modem market will be on a decline, being rapidly replaced by the Fibre to The Home (FTTH) solutions based on Gigabit Ethernet passive optical networking (GE-PON) systems in the future. It will then evolve into three wavelength PON systems, incorporating video into its applications. FTTH deployments are expected to grow rapidly in the interconnection product market including WLAN systems, broadband routers and video-optical network units (V-ONU), etc.

In the VoIP product market, IP-based PBX and key telephone systems with fiber optic connectivity are likely to grow significantly. Higher diversity of IP phones due to a price decline is also one of the major drivers in the VoIP market.