Japan Puts Its Cable Landings and Its Laying Ships Behind Public Money

Japan’s communications regulator, the Ministry of Internal Affairs and Communications, has approved subsidies for four companies building cable landing stations and offshore branches for international submarine cable systems. SoftBank Corp., IPS Corporation, IPS Pro Co. and Shikoku Electric Power were selected after a competitive application period that ran from June 5 to July 6, 2026.

The money comes from the FY2025 Supplementary Budget for the Digital Infrastructure Strengthening Project through Regional Distribution of Submarine Cables. The ministry earmarked JPY40 billion, or US$252.55 million, for the project in FY2025, on top of JPY50 billion allocated in FY2021 and JPY30 billion in FY2023. Summed across successive supplementary budgets, the fund has taken in JPY132.5 billion, about US$1.97 billion. The Communications and Information Network Association of Japan administers it and channels money to private operators, leaving state-owned networks out of the allocation.

What the money buys is geography. More than 80 percent of Japan’s data centres and nearly all of its international cable landing stations sit in Chiba Prefecture, serving Tokyo and east Japan, and Mie Prefecture, serving Osaka and west Japan. Motohiro Tsuchiya, a professor at Keio University’s Graduate School of Media and Governance, wrote that operators gravitate to the shortest route and that this leaves few landing points concentrated in narrow areas, raising exposure to terrorism, missile strikes and natural disaster. Tsuchiya sat on the ministry’s nine-member study group on protecting international submarine cables.

The four awards split the map. SoftBank will build a landing station in Tomakomai City, Hokkaido, to back its AI data centre campus there. IPS Corporation will lay an offshore marine branch and branching unit off Wakayama City, connecting the international Candle Subsea Cable System to the southern Kansai coast. IPS Pro Co. will build a carrier-neutral, open-access landing station in the same city that bypasses Mie and Shima on the way to Osaka. Shikoku Electric Power will develop a landing station, branch line and branching unit in Anan City and offshore Tokushima Prefecture, forming what the ministry calls the Shikoku Digital Gateway, the first international fibre pairs to land on that island.

Route diversification runs alongside a second initiative with a different bottleneck. The ministry has requested JPY100 billion, about US$631 million, for fiscal 2027 to subsidise the purchase and upgrading of domestic cable-laying and repair vessels, covering up to 50 percent of procurement cost. Japan has five cable ships of 5,000 tons or more, three owned by an NTT Group company and two by a KDDI Group subsidiary, and with a typical working life of around 40 years some are already past their thirtieth. New vessels are estimated to cost between JPY40 billion and JPY50 billion each, which puts the request in the range of three to five ships. NEC, which holds roughly 20 percent of the global undersea cable manufacturing market, has no fleet of its own and leases vessels from overseas. TeleGeography, which tracks the sector, puts average annual investment in submarine cable systems at about US$2 billion, so the JPY100 billion request covers roughly three years of average global spending on its own.

The programme follows suspicious cable breaks in the waters off Taiwan and the Baltic Sea in 2024, and amendments to the Economic Security Promotion Act passed in June 2026 elevated international submarine cables to specified critical materials and core critical infrastructure, a classification the 2022 version did not give them. The revised law also lets the Japan Bank for International Cooperation issue high-risk subordinated debt and invest directly in designated overseas business projects.

Japan is not the only government moving. Dell’Oro Group’s optical transport tracking put worldwide equipment revenue up 15 percent year over year in the second quarter of 2026, with data centre interconnect revenue from IPoDWDM ZR/ZR+ and WDM systems growing 45 percent in the period, and it estimates more than 40 percent of that revenue came from North America. The research house had earlier raised its full-year 2026 optical transport forecast from 10 percent to 16 percent growth, a market it expects to pass US$18 billion in manufacturer revenue for the first time since 2000.

Supplier’s note: Regional landing stations and branching units are the sort of project that generates long-tail spares business for us, and the requests we see are for the terrestrial side of the station. We hold ODF distribution frames, EDFA fibre amplifier modules, optical transceiver modules and patch cords in stock in Shenzhen and Hong Kong, with ready-to-ship units leaving inside two working days and full pallet orders taking one to two weeks where a specific amplifier revision has to be pulled from allocation. Where an OEM amplifier sits on allocation we quote cross-reference equivalents matched to the same gain and noise figure and record the output power and gain flatness measured on our test bench for every unit before dispatch. Commissioning teams report that the recurring failures are dirty connectors on landing racks, splice closures leaking after storm surges and amplifier modules drifting in high ambient temperature, so every shipment leaves with cleaning cassettes, spare splice closures and a matched spare amplifier module. Cable consortiums, telecom operators, government contractors and network integration firms are the usual buyers, and orders arrive as mixed pallets sized for one landing station, priced per item once freight and duty are quoted.