Feature: Stirrings of u-Japan

Feature: Stirrings of u-Japan

Four years have passed since the Japanesegovernment enacted the IT Basic Law forpromoting intensive and prompt formation ofan advanced information and telecommunica-tions network society. During this course, thee-Japan Strategy intended for making Japan“the world’s most advanced IT nation by2005” was launched in January 2001. Whileintroduction of broadband was first consid-ered to make a slow start, the infrastructurewas developed at an unexpected speed, andJapan has come to boast the world’s mostaffordable and high-speed broadband envi-ronment.

In light of such steady progress of broad-band diffusion, the IT Strategy Headquartersreviewed the e-Japan Strategy in July 2003.In this process, the headquarters drasticallyshifted the focus from original infrastructuredevelopment to promotion of IT use, andpositioned formation of a ubiquitous networksociety as the goal of the infrastructure devel-opment for a new IT society.

In response, with the aim of achieving aubiquitous network society (u-Japan)—asociety that allows connection to networks“anytime, anywhere, by anything and any-one” and enables an easy exchange of infor-mation—by 2010, the Ministry of InternalAffairs and Communications (MIC) outlinedthe future of such a society and summarizedthe necessary policies as the u-Japan Policy.While the e-Japan Strategy had aimed atcatching up with other countries by makingJapan “the world’s most advanced IT nation

by 2005,” the u-Japan Policy sets a new goalto have Japan lead the world as a frontrunnerby 2010.

Against such a background, this year’swhite paper features “Stirrings of u-Japan”and analyzes the current status towardachieving u-Japan in 2010. At the same time,it intends to clarify the progress in ICT useby individuals and companies since thelaunch of the e-Japan Strategy. Furthermore,international comparison was made with theUnited States (a country advanced in ICTuse) and the Republic of Korea (a countrymaking rapid growth in the ICT field) asmuch as possible.

“IT” and “ICT” are English terms usedfor information and communications technol-ogy including the Internet and mobile phones;the former is widely used in Japan at present,but the latter is widely established overseassuch as in Europe, Latin America, Asia, aswell as the United Nations and other interna-tional organizations.

Since the most important concept in thetargeted ubiquitous network society is toachieve enhanced communications, the MICbasically uses the term “ICT” in this docu-ment in order to further clarify the signifi-cance of communications in the technology.

5

Introduction

Ch

ap

te

r1

6

1 u-Japan“u-Japan” is what Japan will be like in 2010 when

information and communications technology (ICT) willbe applied toward resolving various problems in society.It is based on four principles: ubiquitous (connectseveryone and everything); universal (can be easily usedby the elderly, etc.); user-oriented (based on users’ view-points); and unique (creative and vigorous). Amongthese, “ubiquitous” plays the key role. Ubiquitous net-works are characterized by the realization of easy “per-son-to-person” plus “person-to-goods” and “goods-to-goods” communications (Figure 1-1-1). They allow easyconnection to networks “anytime, anywhere, by anythingand anyone” by attaching small, low-priced devices to allkinds of things in all kinds of places. As a result, ICTwill penetrate every corner of daily life like grassroots.

On the other hand, new problems will arise in theprocess of achieving u-Japan. For example, if individu-als’ purchase history and activity history become easilyaccessible through networks, there would be a risk ofleakage or misuse of such personal information. In addi-tion, if various devices at home become connected tonetworks, these devices would also become subject tovirus infections and unauthorized access.

In order to overcome these problems and to achieveu-Japan in an ideal way, the MIC established the PolicyRoundtable for Realizing a Ubiquitous Network Societyin March 2004 and compiled the “u-Japan Policy” inDecember of the same year.

2 People’s expectations for ubiqui-tous networks

Users were asked what special expectations they hadof the various benefits of ubiquitous networks. The topanswer was a “safer and more secure life” at 55.7%, fol-lowed by “greater convenience” at 42.2%, “quickerresponse to disasters” at 27.4%, and “safer and morepleasant to drive and/or walk” at 22.3%. The result indi-cates that user expectations are particularly high for mat-ters related to safety and security (Figure 1-1-2).

3. Trend in corporate use of ubiqui-tous networks

Corporate use of radio frequency identification(RFID) tags, contactless smart cards, and new network-compatible devices (ubiquitous network tools) are mak-ing notable progress.

Section 1Use of Ubiquitous Networks by Individuals andCompanies

Figure 1-1-1 The u-Japan concept

�� ! "��

(1) Introduction of ubiquitous network tools in intra-cor-porate/inter-corporate operations

Comparing the status of the introduction of ubiqui-tous network tools in intra-corporate/inter-corporateoperations between FY 2003 and FY 2004, the percent-age of companies that answered “already introduced”increased by 4.4 points for RFID tags and 9.2 points forcontactless smart cards, while the percentage of compa-nies that answered “introduction under consideration(including ‘introduction scheduled’)” increased by 15.3points for RFID tags and 17.2 points for contactlesssmart cards. This suggests that the introduction of ubiq-uitous network tools has progressed and that more com-panies have come to consider introducing them (Figure1-1-3).

(2) Offer of general consumer products and servicesusing ubiquitous network tools

Comparing the status of offer of general consumerproducts and services using ubiquitous network toolsbetween FY 2003 and FY 2004, the percentage of com-panies that answered “already offered” increased by 4.3points for RFID tags and 4.5 points for contactless smartcards, while the percentage of companies that answered“offer under consideration (including ‘offer scheduled’)”increased by 6.4 points for RFID tags and 7.7 points forcontactless smart cards. The result indicates that morecompanies have come to consider offering products andservices using ubiquitous network tools in line with theincreased offer of such products and services (Figure 1-1-4).

Ch

ap

te

r1

7

Figure 1-1-2 Benefits expected in ubiquitous networks (multiple responses possible)

��

��

� ��

��

��

��

��

��

�� !"

#��

��

$��

#�� "

%��

&"

� ��' � �� (�� )�� *��+ �� ,�� -�� "

. /. 0. 1. 2. 3. 4.

55.7

42.2

27.4

22.3

19.5

17.6

17.6

15.5

14.8

12.1

10.8

9.9

8.2

0.5

Figure 1-1-3 Introduction of ubiquitous network tools in intra-corporate/inter-corporate operations

��

��

��

��

��

�

�

�

�

� ��

� ��

� ��

� ��

RFID tags Contactless smart cards

New network-compatible devices Positioning functions such as GPS

� �� ! ��

"#��$� %�� $��$

�� $��% � ��$�#�$

�� $��% � ��$�� %$��% �

0.2

4.6 5.5 13.6

6.1 4.7 15.8 4.1 5.2

3.9 4.0

13.1 15.55.7

12.5

3.8

Ch

ap

te

r1

8

��

��

��

��

��

��

��

��

��

��

Figure 1-1-4 Offer of general consumer products and services using ubiquitous tools

� �� ! ��

RFID tags Contactless smart cards

New network-compatible devices Positioning functions such as GPS

"#��$� ��$

%�� $�#�$

%�� $�� &$��& �

6.2

5.1 4.1 8.5

4.2 3.5 10.3 3.4 4.6 7.9

6.1

1.6

4.2

7.2

10.7

0.8

Figure 1-1-5 Introduction of ubiquitous network tools

��

RFID tags

��

��

��

� �!�"�#� � � !� "� #�

Contactless smart cards

� �!�"�#� � � !� "� #�

New network-compatible devices

� �!�"�#� � � !� "� #�

Positioning functions such as GPS

� �!�"�#� � � !� "� #�

$��

��

%&'

��(��(�� )�� *��

��(��(�� )�� *��

��(��(�� )�� *��

��(��(�� )�� *��

$��

��

%&'

$��

��

%&'

$��

��

%&'

�+�

�+�

�+�

�+�

�+�

�+�

�+�

�+�

13.6 5.5 4.6

11.1 6.9 9.4

10.7 9.5 9.0

15.5 5.7 13.1

6.1 4.2

5.3 2.93.0

10.33.5

18.5

4.7 2.813.0 6.8 5.0 12.3

8.5 4.0

15.8 4.7

4.1

10.6

4.4 10.010.2 2.76.4 5.2

6.9 4.68.2 4.6 2.1

3.4 7.912.5 5.2 4.6

5.9

10.0

6.1 10.74.2

3.5 3.42.3

9.3 11.15.210.8 6.7

5.0 3.0

5.1 4.1 8.5

7.0 4.6 5.8

5.3 3.4 12.1

Ch

ap

te

r1

9

(3) Comparison among Japan, the United States, andthe Republic of Korea concerning the trend in corpo-rate use of ubiquitous networks

The percentage of companies that have “alreadyintroduced” ubiquitous network tools in intra-corporate/inter-corporate operations was high in Japanfor contactless smart cards and high in the United Statesfor the other tools. Meanwhile, the percentage includingcompanies that are “scheduled or considering introduc-tion” was high in Japan for contactless smart cards, highin the Republic of Korea for RFID tags, and high in theUnited States for the other tools.

The percentage of companies that “already offer”products and/or services using ubiquitous network toolswas high in the Republic of Korea for contactless smartcards and high in the United States for the other tools.Meanwhile, the percentage including companies that are“scheduled or considering offering” was high in theRepublic of Korea for all tools, followed by Japan(Figure 1-1-5).

4. Example use of ubiquitous networks(1) Services provided through mobile phones withcontactless smart card technology

While the functions of mobile phone terminals are

becoming more and more advanced, such as the Internetaccess function and the camera function, various servicesprovided through mobile phone terminals with contact-less smart card technology were launched in July 2004(Figure 1-1-6).

The users of mobile phones with contactless smartcard technology (379 persons) were surveyed withregards to the services they use, the degree of satisfac-tion with the services, and the intent to continue usingthe services. The most frequently used service was “elec-tronic money settlements” at an overwhelming 76.5%,followed by “membership cards, reward cards, etc.” at33.2% (Figure 1-1-7).

With regard to the degree of user satisfaction for theservices, 34.0% answered “very satisfied/satisfied,”which exceeded the 11.6% who answered “very dissatis-fied/somewhat dissatisfied” (Figure 1-1-8).

In terms of the intent to continue using the services,“want to continue” was high at 65.7%, and as many as87.1% of the users predicted that the services “willspread widely/will spread to a certain extent.”

(2) Utilization of RFID tags for safety of school childrenIn order to understand the effectiveness and prob-

lems involved in use of RFID tags for safety of elemen-

Figure 1-1-7 Services of mobile phones with contactless smart card technology used by users (multiple responses possible)

Figure 1-1-8 Degree of user satisfaction for the services of mobile phones with contactless smart card technology

��

��

��

��

��

��

��

� !

� !

"�� #�� $%$%& �� $%$%' ( "��)�� *�� +�,�� -�� "�� .�� )��!

/ $/ 0/ 1/ 2/ 3/ 4/ &/ '/ 5/ $//

/ $/ 0/ 1/ 2/ 3/ 4/ &/ '/ 5/ $//

6��

"��

-��

"��

6��

76.5

33.26.3 27.7 54.4 8.2 3.4

24.3

22.7

14.5

5.3

1.6

4.7

Figure 1-1-6 Examples of the services of mobile phones with contactless smart card technology

Ch

ap

te

r1

10

tary school children, the Kinki Bureau ofTelecommunications of the Ministry of Internal Affairsand Communications (MIC), implemented a demonstra-tion test for a system that records the school arrival anddeparture times using RFID tags and notifies parents ofthis information by e-mail under the cooperation ofShinjo Daini Elementary School in Tanabe City,Wakayama Prefecture (October 25 - November 5, 2004)(Figure 1-1-9).

After the test, a questionnaire survey was conductedon the participants to check their evaluations of thedemonstration test. According to the survey results, theschool arrival and departure notifications sent to the par-ents’ mobile phones had been “checked almost everyday”by 81.0% of the parents, while 82.9% “felt more reas-sured/felt slightly more reassured” throughout the demon-stration test (Figure 1-1-10). As for the future need forsafety or security programs using ICT technology, such asRFID tags and network cameras, 71.3% answered thatthey were “necessary/somewhat necessary.” The biggestreason was “because the social conditions have changed,and criminal incidents occur frequently,” which was men-tioned by 65.8% (Figure 1-1-11).

(3) Utilization of Contactless Smart Cards forProduction Management

A factory of a PC manufacturer had conducted oper-ations by allotting one instruction sheet per PC unit, andhaving the respective production line staff members con-firm the specifications and precautions indicated in therelevant part of the production instruction sheet.However, it was time-consuming to check the relevantpart of the sheet. In addition, a barcode printed on thesheet had been read in each process of assembly, inspec-tion, shipment, etc. for production management, and thisreading process was conducted about 100,000 times aday. Thus, in order to facilitate confirmation of the con-tent of the production instruction sheet, reduce the bar-code reading process load, and reinforce traceability,contactless smart cards were introduced in September2004.

Due to the introduction of the contactless smartcards, the factory became able to facilitate confirmationof the operation content, automatically store data such asproduction history and inspection results in the assem-bly/inspection phases, and improve efficiency of the

Figure 1-1-9 Outline of the demonstration test of the use of RFID tags for safety of school children

Figure 1-1-10 Overall impression of the program

��

�� !" #��$ �� %� � &��

�� '��( �� ) *�+� � �� ) ,--.�

�� !

�� )��" �� !

�� )��" �� / ��

0 �)� �� ! �� / ��

1�)�

0��"

��2)�� "

0 �)� ��" �� "

��2)�� "

%��"

- �- ,- 3- 4- .- 5- 6- 7- �- �--

Figure 1-1-11 Future need for safety or security programs using ICT technology

- �- ,- 3- 4- .- 5- 6- 7- �- �--

41.8 41.1 37.2 34.1 22.013.7 2.1 6.1 0.61.4

Ch

ap

te

r1

11

shipping/delivery processes by reading multiple contact-less smart cards in a batch, and improve the productivityby more than 10% as a result.

5. Japan’s future challenges andsolutions using ubiquitous net-works

The “Policy Roundtable for Realizing a UbiquitousNetwork Society” conducted a questionnaire survey on6,000 consumers concerning the important themes that

Japanese society should address toward 2010. As aresult, the theme that was most mentioned as beingextremely important was “achieving a safe and secureliving environment,” indicated by nearly 70% of therespondents, followed by energy, medical care, and theenvironment (Figure 1-1-12).

In addition, more specific challenges were investi-gated regarding these individual important themes, andexamples of solutions using ubiquitous networks wereidentified through consumer group interviews and corpo-rate interviews (Figure 1-1-13).

Figure 1-1-12 Important theme that Japanese society should address toward 2010 (multiple responses possible)

��

��

��

��

��

��

��

!��

"��

#��

#��

��$��

�� $��

�� % ��% � ��

&��

��

'��

()*

+ �� ,�� -

. /. 0. 1. 2.

69.2

55.5

54.9

52.7

50.1

47.3

44.8

38.0

32.6

32.3

32.1

30.0

27.4

20.0

19.6

19.2

17.1

Figure 1-1-13 Specific future challenges and solution examples using ubiquitous networks

�� !�� "�� #!$�� %��&��' ��

( ) '� ��* �� +�� &,

Ch

ap

te

r1

12

1. Progress in ICT Use(1) Increase in the number of Internet users

The number of Internet users at the end of 2004 wasestimated to be 79.48 million (an increase of 2.8% overthe previous year), and the penetration rate was 62.3%,increasing by 1.7 points over the end of 2003 (60.6%)(Figure 1-2-1). Since the penetration rate exceeded 60%at the end of 2003 and significant diffusion has alreadybeen achieved, the speed of the increase is slowingdown. Compared to the end of the year preceding thelaunch of the e-Japan strategy (2000), the number ofInternet users increased by about 32 million, and thepenetration rate by 25.2 points. This indicates thatInternet use by individuals has steadily progressed inthese four years.

(2) Increase in the number of broadband householdsThe percentage of broadband households (using

FTTH, DSL, cable Internet, or wireless access (FWA,etc.)) to the total households accessing the Internet viahome PCs was 62.0% at the end of 2004, increasing by14.2 points over the percentage at the end of 2003(47.8%). On the other hand, the percentage of dial-uphouseholds was 20.4%, decreasing by 9.8 points fromthe end of 2003 (30.2%). Compared to the end of theyear preceding the launch of the e-Japan strategy (2000),the number of broadband households rapidly expanded,increasing by 55.2 points (Figure 1-2-2).

Section 2ICT Use by Individuals

Figure 1-2-1 Number of Internet users and penetration rate

��

��

��

�� !""" !""� !""! !""# !""$

% �&&�� '��( %)(

%�� (

"

!"

$"

*"

"

�""

11.55 16.9427.06

47.0855.93

69.4277.30 79.48

"

�"

!"

#"

$"

+"

*"

�"

9.213.4

21.4

37.1

44.0

54.560.6 62.3

Figure 1-2-2 Internet access method at home

��

� �� !"�� #$$%&'� (�)� �� *�� +,� ��-'�

�� .��/�� 0.�� !"�� #$$1&'

"�� #$$$ "�� #$$2 "�� #$$1

�� (3 ��0.�� 0'

�4'

$

#$

1$

5$

6$

6.8

47.8

62.0

33.5

22.1 18.4

55.4

30.2

20.4

Ch

ap

te

r1

13

(3) Degree of Satisfaction with the InternetWhen Internet users were asked how satisfied they

were with the present Internet use, they generally indi-cated a high degree of satisfaction with PC Internet use.However, the degree of dissatisfaction was comparative-ly high for Internet use through mobile phones (in thiswhite paper, “mobile phones” collectively refer tomobile phones, PHS, and PDA). This is presumablybecause users accustomed to PC Internet use find thatthe usability (ease of viewing the screen, ease of opera-tion, etc.) of mobile phones does not match up to that ofPCs. In addition, the number of respondents answering“don’t know” is high for mobile phones compared toPCs. The users’ opinions are likely to be still unfixedbecause they have not used the mobile phone Internet foras long time as the PC Internet and the services providedare undergoing rapid changes (Figure 1-2-3).

(4) Progress of ICT in respective fieldsWhen Internet users were asked about the progress

of ICT use in main fields, more than 80% believed that

ICT use has “made a lot of progress/made someprogress” in the fields of information gathering, shop-ping, communication, amusement/contents, and financialtransactions, but as many as 30 to 40% believed that ICTuse has “made little progress/made no progress” in thefields of medical care, administration, and education(Figure 1-2-4).

2 Changes in people’s livesThe users are aware of both positive and negative

influences of the Internet on society. The most men-tioned positive influences included “makes life moreconvenient through the information search function andonline shopping,” “generates various new businesses andchanges the industrial structure,” and “improves thecapacity to convey knowledge and know-how.” On theother hand, the most mentioned negative influencesincluded “flooded with information and makes selectionof the necessary information difficult,” “encouragescrimes such as libel and providing illigal/harmful infor-mation” and “reduces the ability to give in-depth thought

Figure 1-2-4 Progress of ICT use in main fields

��

��

�� !��" ��

�#�

$ %$ &$ '$ ($ )$$

42.9

49.7

42.0

38.8

47.9

22.6

15.9

15.2

16.2

12.5

46.2 6.3 0.2 4.4

39.3 6.4 0.6 4.0

40.5 9.7 1.2 6.5

42.7 8.8 2.5 7.2

33.2 4.9 3.5 10.5

44.6 17.4 4.8 10.7

38.3

35.8

31.3

26.8 6.3 12.6

27.2 6.5 15.3

30.9 10.9 10.7

27.7 31.0 11.5 17.2

*�� +��

�+��

,� ��

- �� .��

/��

0��

1 �� .��

1��

-� �� 2

��

Figure 1-2-3 Degree of satisfaction in the PC/mobile phone Internet

��

� �� ! �� !�� "� �� #�� !�� $$� �� !

!�%��&�� #�� !�%�� '

(�� !�� #�� !��)�� !��

*�� !�� *��+ ��

�,� �,�-.-/-0-1-2-- - .- /- 0- 1- 2--

PC Internet users Mobile phone Internet users

2.5

9.369.814.83.52.6

6.666.320.64.22.3

5.365.720.73.44.8

3.656.628.07.44.4

2.744.735.911.15.5

1.828.340.123.06.8

4.541.227.325.91.1

6.055.525.911.41.2

0.4 20.5 39.6 28.9 10.6

1.0 18.3 30.8 34.1 15.2

0.8 14.6 31.0 40.2 13.4

1.0 25.4 31.1 22.3 20.1

1.8 26.4 29.8 29.9 12.6

0.8 26.2 30.8 22.8 19.4

0.9 19.7 32.5 29.8 17.1

1.8 24.5 30.0 34.4 9.7

2.5 29.1 27.6 22.8 18.0

65.127.33.51.6 3��

�� !�� !��#� ��

4�� ! ��!��#� ��

5�� ! ��

4�� ! �� 6��

"�!��#� ��

��

7�� #��

�$$� �� #�� !�%��

Ch

ap

te

r1

14

to things.” The percentage of users who have a positiveimpression that the Internet “has a favorable impact onsociety on the whole” was 75.6% (Figure 1-2-5).

3 Stimulation of communicationThe utilization rate of PC e-mail in Japan is 94.2%,

and 90% of Internet users send less than five e-mailmessages per day. In the meantime, the utilization rate ofmobile phone e-mail is 87.7%, and 80% of the userssend less than five e-mail messages per day. While theutilization rate of PC e-mail in the United States is highat 96.1%, the utilization rate of mobile phone e-mail isextremely low at 12.4%. In the Republic of Korea, themobile phone Internet is widely used similarly to Japan,but the utilization rate of mobile phone e-mail is 43.1%,which is far lower than the rate in Japan. In this manner,the high utilization rate of mobile phone e-mail is char-acteristic to Japan (Figures 1-2-6 and 1-2-7).

The communication tool other than e-mail that ismost used by Internet users is “Internet BBS” at 45.1%,followed by “a personal Website” (27.1%). At the sametime, the percentage of users who have “a personal blog”is 14.9%. When comparing Japan, the United States, andthe Republic of Korea, the utilization rate of such toolsis generally high in the Republic of Korea where 37.3%of Internet users have a personal blog (Figure 1-2-8).

4 Diffusion of online shopping, etc.Among PC Internet users, those who have experi-

ence in online shopping accounted for 89.1% in Japan,89.7% in the United States, and 86.1% in the Republicof Korea. In this manner, online shopping is widely usedin all three countries. On the other hand, among mobilephone Internet users, those who have experience inonline shopping account for 18.1% in Japan, 14.7% inthe United States, and 31.4% in the Republic of Korea.In other words, online shopping through mobile phonesis more popular in the Republic of Korea than in Japanor the United States (Figure 1-2-9).The annual amount of purchases (throughout 2004)through PCs was 95,062 yen in Japan, 1,202 dollars(about 129,500 yen) in the United States, and 824,187won (about 78,100 yen) in the Republic of Korea. Thatof purchases through mobile phones was 34,694 yen inJapan, 697 dollars (about 75,100 yen) in the UnitedStates, and 163,813 won (about 15,500 yen) in theRepublic of Korea.

The degree of satisfaction with PC online shoppingis high in Japan, the United States, and the Republic ofKorea, but in terms of mobile phone online shopping itis relatively low (Figure 1-2-10).

Internet users’ intent to use PC online shopping inthe future is high at 92.3% in Japan, 88.1% in the UnitedStates, and 88.5% in the Republic of Korea, while theintent to use mobile phone online shopping is 21.5% inJapan, 8.9% in the United States, and 23.6% in theRepublic of Korea, showing that the intent of use in theUnited States is lower than that in Japan and theRepublic of Korea.

Figure 1-2-5 Social influences of the Internet

��

�� !� �� "��

��"�� #��

�$�

%

&%

'%

(%

)%

*%%

15.6

60.0

16.2

7.31.0

48.5

44.9

5.31.00.3

40.1

47.1

10.41.80.5

32.6

57.0

9.30.60.4

24.1

57.5

14.03.41.0

18.5

54.1

22.5

3.81.1

17.7

60.1

19.9

1.70.6

14.3

40.6

23.6

17.9

3.5

13.5

43.2

87.5

4.61.2

35.2

49.5

11.92.50.9

30.2

50.9

16.8

1.30.8

21.1

43.1

28.7

5.21.9

18.4

46.1

31.5

3.10.8

16.3

36.5

40.7

4.71.9

+��

��

��"�

��

��

��

��

��

!"��

��

��

� �

��

��

��

��

�, ��

��"�

��

��

� ��

� ��

��

� "��

� ��

��

#��

��

��

� ��

-

��.�

"��

� � �

��

/��

��

� ��

��

��

��

"� ��

��

��

� ��

�"� ��

�

0��

��

��"��

��

� ��

�

��

��1 �

�"��

��"� ��

�

2��

��

� ��

��

��

��,!� �

��

� ��

��

��

3��

��"�

��

��

��

� �

��"� ��

� ��

��

� ��

��

� ��

4��

��

� ��

��

��

��

��

��

��

��

0��"��

� ��

� ��

��

��

��

��

��

��

� ��

�"� ��

�

� �"�

��

�""�

��

�

��

��

��

5��

��

��"�

�� "

��

��

�

��

��

��

��"�

��

��

/��

��

��

�

��,��

��

��

��

��

��

��

��

��

��

Ch

ap

te

r1

15

Figure 1-2-6 Utilization rate of e-mail

��

��

��

� ��

��

!"#

�

��

$�

��

%�

��

Figure 1-2-7 Frequency of sending e-mail messages

��& '� ��( �� ()�� *�(�� (�� +� �� +��,� -��.

� �� $� �� %� ��

94.2 87.7 96.1

12.4

5.8 46.3 37.2 6.1 1.8 0.7 2.0

12.3 30.3 39.1 11.5 3.2 1.5 2.1

84.8

43.1

��

��

!"#

Figure 1-2-8 Utilization rate of communication tools (multiple responses possible)

�� !"�# ��$

!%$

!%$

Figure 1-2-9 Utilization rate of online shopping

&�� '�( )*+

,

,

�,

-,

.,

/,

�,

0,

&��　　　　'�(　　　　)*+ &��　　　　'�(　　　　)*+

45.1

13.5

27.1

15.4

33.3

26.2

34.7

54.8

25.9

10.8

36.7

22.7

47.6

58.4

14.9

6.8

37.3

2.5 3.3 3.0

'��

1��22�

3��

"�#��

��

��

��4��

��

)��

��5��

�� #��

35��

��4��

3��

#��

'��

��

��

,

�,

.,

�,

6,

,,

89.1

18.1

89.7

14.731.4

86.1

&�� '�( )*+

Ch

ap

te

r1

5 Increasing use of media contents(1) Overall trend of media contents market

The overall media contents market has hit the ceilingat about 11 trillion yen during the period from 2000 to2003. Broken down by content type, the market foraudio contents (music, radio programs, etc.) and the textcontents market (newspaper articles, literary contents,etc.) are shrinking, while the market for visual contents(movies, TV programs, etc.) is expanding. Each of thesecontent types could be put to secondary use in othermedia after being used in a specific medium. It wasfound that the market for distribution in the first mediumin which produced content is assumed to be distributed(primary distribution market) is shrinking, and the mar-ket for secondary distribution through other media

(multi-use market) is expanding.In recent years, the market for media contents, which

includes music, games and newspaper articles that aredistributed to PCs and mobile phones through theInternet and mobile network (network-based distributionmarket), has been growing. The market expanded toabout 500 billion yen in 2003, increasing by about 200billion yen in three years (Figure 1-2-11).

(2) Internet contentsAn overwhelmingly high percentage of PC Internet

users use free contents. The most frequently used paidcontents are “music” (7.2%) followed by “games”(6.7%) and “moving images” (4.8%). Free contents arealso frequently used among mobile phone Internet users,

16

Figure 1-2-10 Degree of satisfaction of online shoppers

��

� �� !�� !� � �� "�� # � �� ! �� !� � ��

�� "�� # �� $%

�&� �&�

PC Mobile phones, etc.

'(')'*'+','' -(' -,' ' ,' (' .' )' /' *'

0�� 1�2 345

74.692.1

70.379.0

96.360.9

65.891.3

65.278.4

89.579.1

16.2

-0.8

0.85.6

37.242.1

7.6-13.9

42.70.7

-10.33.4

-9.3

-6.348.1

-0.6

-0.1

4.025.9

39.8-12.3

54.5

80.732.2

36.874.6

24.617.7

74.541.0

4�� !��

�� -��

��$�� $� ��

6��

��

3�� !��

��! �� ! ��!��

Figure 1-2-11 Proportion of the network-distributed media contents market in the overall contents market

��

��

��

� � ��

�� !��" � �� #

��!��" � �� $ � ��

�� !��"� �� "��"� �� #

%�� &

'

(

)

*

+

,'

,(

� � ��

��!��" � ��

%��&

-$�� "��

10.9 10.8 10.9

1.7(15.1%)

0.3(2.7%)

1.9(17.6%)

0.4(3.7%)

2.1(19.6%)

0.5(4.9%)

(''' (''( (''.

Ch

ap

te

r1

but while the utilization rate of free contents is lowercompared to that for PC Internet use, the utilization rateof paid contents is higher (Figure 1-2-12).

With regard to the intent for future use of paid con-tents, PC Internet users have a high intent for using“music” (16.5%), followed by “moving images” (13.9%)and “games” (9.0%), while mobile phone Internet usershave a high intent for using “ring-tone melodies, etc.”(37.1%), followed by “games” (16.9%) and “music”(11.8%) (Figure 1-2-13). Music, moving images, andgames are expected to remain as the core Internet con-tents in the future.

When comparing the use of core paid contents (mov-ing images, still images, music, ring-tone melodies,games, and books/cartoons) among Japan, the UnitedStates, and the Republic of Korea, the rate of use is over-whelmingly high in the Republic of Korea, both through

PCs and mobile phones. The use through PCs is the nexthighest in the United States, and then in Japan, and theuse through mobile phones is the next highest in Japan,and then in the United States (Figure 1-2-14). One of thereasons for such active use of paid contents in theRepublic of Korea is that settlement of small amounts issimple and easy due to the diffusion of the system tohave the fees charged by the mobile phone carriers.

The average annual amount of paid contents used in2004 through PCs was 9,464 yen in Japan, 180 dollars(about 19,400 yen) in the United States, and 129,059won (about 12,200 yen) in the Republic of Korea, whilethat used through mobile phones was 4,036 yen in Japan,233 dollars (about 25,100 yen) in the United States, and93,899 won (about 8,900 yen) in the Republic of Korea.

17

Figure 1-2-12 Status of use of contents (multiple responses possible)

��

� �� !� �� "�� # �� # $��%& �� ' � �()(

�*� �*�

�*� �*�

PC Internet users Mobile phones Internet users

+��

, -, ., /, 0, 1, 2, 3, 4,

Figure 1-2-13 Intent for future use of paid Internet contents (multiple responses possible)

��

� �� !� �� "�� # �� # $��%& �� ' � �()(

PC Internet users Mobile phones Internet users

,-,.,/,0,1,2, , -, ., /, 0, 1, 2,

,-,.,/,0,1,2,3,4,

58.12.7

54.51.4

53.01.0

46.22.1

4.838.3

37.26.7

27.52.2

29.7

16.5

13.9

9.0

7.5

6.3

5.8

5.5

4.5

2.2

59.6

11.8

37.1

5.8

16.9

8.9

2.9

6.1

8.4

10.6

2.3

50.2

7.2

16.43.8

19.674.3 56.1

36.01.24.4

35.637.7

3.76.0

2.29.3

14.322.0

2.412.6

7.326.6

3.325.1

3.625.4

4.122.35��' ��%� ��' � �� #��

��6��%�7�� '�� #��

8�� ' ��6�� #��

� �� %��

5��% ��%��

9��

+�� & ��%

5��

:��%& �� ' � �(�

;��6��

��

5��

:��%& �� ' � �(�

5��% ��%��

9��

5��' ��%� ��' � �� #��

;��6��

��6��%�7�� '�� #��

8�� ' ��6�� #��

� �� %��

+�� & ��%

<�� # ��%�� # � ��

Ch

ap

te

r1

With regard to copyright awareness in using con-tents, users who are “always aware/sometimes aware”account for 46.4% in Japan, 71.8% in the United States,and 49.8% in the Republic of Korea, and those who are“often not aware/never aware” account for 53.6% inJapan, 28.2% in the United States, and 50.2% in theRepublic of Korea. Copyright awareness is higher in theUnited States than in the other two countries, and theawareness level is about the same in Japan and theRepublic of Korea (Figure 1-2-15).

The percentage of users of P2P file sharing softwareis tremendously large in the Republic of Korea comparedto the other two countries, with the utilization rate being

3.7% in Japan, 11.6% in the United States, and 44.2% inthe Republic of Korea (Figure 1-2-16).

(3) Music distributionThe music distribution service started by a U.S. com-

pany, A, in April 2003 (launched in April 2003 in theUnited States and in June 2004 in Europe) was an explo-sive hit due to the large collection of music available, thelow price, and loose copyright restrictions. The cumula-tive total of the number of tunes sold exceeded 300 mil-lion in March 2005, and currently the daily sales exceedone million tunes. While purchases of music via theInternet surged from April 2003 in the United States, the

18

Figure 1-2-14 Status of use of paid contents (multiple responses possible)

��

��

PC Internet users Mobile phone Internet users

Figure 1-2-15 Copyright awareness upon using contents

�� !"#"!$ �� !"#"!% ��

&!&#&'&(&$&%& & !& #& '& (& $& %&

)�� *�+ ,-.

)��

*�+

,-.

)��

*�+

,-.

��& #& (& %& /& !&&

Figure 1-2-16 Status of use of P2P file sharing software

��& #& (& %& /& !&&

+��

��0� �0��

-� ��

��

1��

2�� 3� �� 4 �� 0��

��

5 -�� 0�� 3�� 6� �� 7�� 3� � � �� 8�� " �� 0��4 � �9:9

6.7 14.39.8

33.4

2.411.0

18.3

3.711.1

29.6

35.613.8

52.9

1.26.6

12.4

2.23.4

12.4

7.35.7

22.8

14.629.2

4.811.7

26.4

7.213.2

23.6

3.86.8

19.3

2.22.3

16.6

2.14.5

16.0

;�0��

<�� 0� ��

<��

,�� " �� 0��4 � �95

=��>��

�� " ��

� �� 0� ��

10.6

24.7

15.0

47.1 12.0 16.2

34.8 36.6 13.6

35.8 3.7

11.6

44.2

21.9 66.4

15.4 40.4

10.5 85.827.0 26.6

Ch

ap

te

r1

shipment volume of musical CDs in 2004 also increasedby 2.8% over the previous year (Figure 1-2-17).

Many Japanese companies have also entered themusic distribution market since 2004 (Figure 1-2-18).The Japanese music distribution market is still smallcompared to the United States with two major compa-nies’ monthly music sales in January 2005 being about510,000 tunes. This is considered to be because theJapanese music distribution services are not sufficientlyattractive for users at present.

Among Internet users, those who use music distribu-tion services through PCs account for 8.9%, which isstill small in number (Figure 1-2-19).

The most commonly mentioned dissatisfaction withmusic distribution services through PCs was “the priceof music is high” (26.3%), followed by “the restrictionson copying and transfer are tight” (17.1%), “it takes a lotof effort to find the desired tune” (15.9%), and “thedesired tune is not available/the music collection is

small” (15.2%) (Figure 1-2-20). This indicates that thereis a high degree of dissatisfaction with the price, copy-right control, and the number of available tunes. As forthe intent for using the service in the future, those who“want to use it” accounted for 42.9%.

6 Comparison of ICT use in Japan,the United States, and the Republicof Korea(1) Internet use through mobile phones

The Internet utilization rate of mobile phone users isthe highest in Japan at 78.8%, followed by the Republicof Korea at 66.9%. In the United States the rate is32.2%, a considerably low percentage compared toJapan and the Republic of Korea, indicating that Internetuse through mobile phones is not in wide use in U.S.society.

19

Figure 1-2-17 Status of music distribution services and CD shipment in the United States

Figure 1-2-19 Utilization rate of online music distribution　

Figure 1-2-20 Dissatisfying aspects of online music distribution services

��

�� ! �� " �� #$�% ��&

#'&#(�� &

#��&

Figure 1-2-18 Status of major Japanese music distributors (15 companies) (as of March 2005)

)�� (%�� %� * #��(��&

+, �-�(�� (� #��(�� -� �� &

"

."

""

."

�""

�."

/""

/."

0""

�""� �""/ �""0

Time of launch 1999 or earlier: 2 companies 2000-2003: 3 companies 2004 or after: 10 companies

Writing on a CD-R

Prohibited: 5 companies Prohibited except for certain labels/tunes:

10 companies

Compression format

Only WMA: 9 companies Only ATRAC3: 3 companies Both WMA and ATRAC3: 2 companies Both WMA and MP3: 1 company

Tune available

About 10,000 to 30,000 tunes: 3 companies About 40,000 to 70,000 tunes: 2 companies About 80,000 to 100,000 tunes: 7 companies About 150,000 tunes: 1 company

Price per tune About 150 to 350 yen

8.9%

36.8%54.4%

)-� �� (�� -�-1

)-� �� -�1

2� �� -� �� 1

)-� �� %��13)-� (�� (��1

)-� �� (�1

)-� �� (�� 1

)-� �� -� �� -�-1

)-� �� -� �4��(�� %��(�1

)-�� 1

#'&" . " . �" �. /"

26.3

17.1

15.9

15.2

13.8

9.8

9.7

8.2

4.8

��

+��

5�� 6%��

-8.9

-7.1

2.8

30.6

216.3

� "

��

�7

�0

��

"

�

0

Ch

ap

te

r1

(2) Changes in activity patterns in line with the use ofthe Internet

With respect to changes in daily activity patterns inline with the use of the Internet, many users mentionedthat the time in contact with other media (books, maga-zines, newspaper, and TV), the time for sleep, and thefrequency of going out decreased in Japan, the UnitedStates, and the Republic of Korea. In Japan and theUnited States, the number of users who said the frequen-cy of communicating with family members or friendsand the frequency of traveling increased exceeded the

number who said the frequency decreased.The number of users who said their daily activity

pattern has “not changed” was the highest in the UnitedStates for all of the items, while in the Republic ofKorea, the number of such users was the lowest and thenumber of users who said the frequency or length of time“decreased” was the highest for all of the items. Thisshows that Internet use has had the largest influence onpeople’s daily activity patterns in the Republic of Korea(Figure 1-2-21).

20

Figure 1-2-21 Changes in activity patterns in line with the use of the Internet

��

��

� � �� ! �" �� #��$ � ��! � ��! �"

�� #��$ "�� %& � �� ! �" ��

#�� !�&$

'

('

)'' *)''

*('

'

('

+�� "� �,��

-�. ��"� �,��

/01 ��"� �,��

+�� ! � �,��

-�. ��! � �,��

/01��! � �,��

��%"�� !��

��%"�� !%�!�2��

��%"�� !� ��

��%"�� !

�3

��%"��

��%"�� !

��! ��

��%"�� !

�� "�%��

%%��

��% "��! �

�� "��

4�5�� " !��!��

4�5�� " !��!

�� 6 ��6 ��&

4�5�� " ��!

4�5�� " ��%%��!

�� "�%�� %%��

4�5�� " ��%%��!

�� "��

50.3

65.3

-21.2 -19.0

-17.9

-49.6-45.5

-25.3

-35.7

-18.8

-43.2

-56.5

-22.5

-19.1

-5.30.6

-0.5

-25.9

-51.8

-18.6

-9.6 -10.6

-22.3

-33.2 -32.5

-13.3

-7.3 -2.6

-4.3

-16.8-22.6

0.4

0.9

17.2

28.7

16.5

-10.6

13.7

-11.0

-32.5

-53.5

-23.2-28.0

-50.9

39.5

49.9

69.2

41.2

66.072.5

42.2

52.2

65.1

44.952.2

77.3

37.6

68.176.0

45.3

78.186.7

65.974.882.4

42.4

70.4

82.3

46.7

70.0

83.5

55.8

68.0

80.3

48.5

74.4

86.1

62.169.772.767.059.761.7

54.4

Figure 1-2-21 Changes in activity patterns in line with the use of the Internet

Ch

ap

te

r1

1 Enhanced use of ICT by compa-nies(1) Progress in use of the Internet

Companies’ Internet utilization rate increased by 8.8points from 89.3% at the end of 2000 to 98.1% at the endof 2004, which indicates that most companies are usingthe Internet. Meanwhile, the Internet utilization rate atbusiness establishments increased by 37.0 points from44.8% at the end of 2000 to 81.8% at the end of 2004(Figure 1-3-1).

(2) Introduction of ICT systemsThe introduction of ICT systems has made progress

in almost all operations compared to FY 2002. The intro-duction is particularly noticeable in areas of develop-ment/design and customer services (Figure 1-3-2).

ICT systems are generally introduced for two mainpurposes: “reducing costs/improving operational effi-ciency” and “expanding sales/increasing added value.”When the purposes were compared with those in FY2002, the number of companies that introduced ICT sys-tems for “reducing costs/improving operational efficien-

21

Section 3ICT Use by Companies

Figure 1-3-1 Transition in the Internet utilization rate (left: enterprises; right: establishments)

Figure 1-3-2 Transition in the introduction of ICT systems by type of operations

��

� � ��

��

��

��

��

��

��

��

!��

"��

#��

��

��

$%&

$%&

�� ' �� !�� !( )� �� !�� $# � �� &

�� *�!+ !�� )�� (� ��

)� � �� ,��

)� � ��

��

)��

�

��

��

��

��

-�

.�

/�

0�

1�

�

��

��

.�

0�

��

45.6

25.5

12.5

38.0

33.4

17.0

50.4

34.7

17.3

52.0

36.2

18.6

52.9

46.7

24.1

70.7

36.9

19.0

55.9

12.8

11.0

23.7

32.0

20.4

52.4

71.9

10.9

82.8

61.2

20.4

81.6

54.6

21.5

76.0

58.4

23.4

81.8

38.2

23.9

62.1

47.3

27.9

75.2

39.3

27.0

66.3

42.6

21.6

64.2

41.5

25.1

66.5

49.9

13.4

63.3

52.4

20.2

72.5

62.7

18.2

70.9

50.463.4

71.6 71.3

26.8

98.1

81.8

25.9

97.5

82.6

32.7

96.1

79.1

44.1

94.5

68.0

43.7

89.3

44.8

Ch

ap

te

r1

cy” decreased, while those that introduced the systemsfor “expanding sales/increasing added value” increased(Figures 1-3-3 and 1-3-4). This shows that the conven-tional tendency of Japanese companies to link introduc-tion of ICT with improvement of operational efficiencyhas been undergoing changes over the past two years.

In order to increase the effectiveness of ICT systeminvestment, the mere introduction of ICT systems wouldnot be enough, but efforts such as reviewing the existingoperational processes and verification of the effective-ness would be essential. When such corporate effortstoward increasing the effectiveness were compared withthose in FY 2002, larger efforts were being made inrespect to “verifying cost-effectiveness,” “organization-al/institutional reform for management of ICT systems,”

and “selection and concentration” (Figure 1-3-5).When the actual effects of introducing ICT systems

were compared with those in FY 2002, more companieswere found to recognize effectiveness both in terms ofreducing costs/improving operational efficiency andexpanding sales/increasing added value (Figure 1-3-6).The assumable factors behind such increase are theprogress in the connection of ICT systems between com-panies, changes in the purpose for introducing ICT sys-tems, and advancement in the efforts toward increasingthe effectiveness of ICT system investment.

There are no major differences among Japan, theUnited States, and the Republic of Korea as to the ICTsystem introduction rate by type of operations, exceptthat the introduction in customer services is advanced in

22

��

��

��

��

��

��

��

��

��

��

��

��

��

Figure 1-3-3 Purpose for introducing ICT systems (reducing costs/improving operational efficiency)

Figure 1-3-4 Purpose for introducing ICT systems (expanding sales/increasing added value)

��

��

��

��

��

��

��

��

��

!��

��

"��# ��

��

$��

�#��

��

��

��

��

��

��

��

��

��

!��

��

"��# ��

��

$��

�#��

!%�� !%�� !%�� !%��

!%�� !%�� !%�� !%��

60.0

63.4

25.525.5

10.410.412.212.214.614.64.14.1

3.23.2

25.5

10.412.2

28.1

14.6

41.551.1

4.1

3.213.5

36.7

24.622.6

23.7

37.4

54.2

59.8

28.97.66.5

89.2

85.6

83.3

79.467.0

54.9

84.1

80.7

51.6

78.2

74.1

69.7

68.754.0

43.964.6

59.845.4

Figure 1-3-5 Efforts toward increasing effectiveness of ICT system investment

Figure 1-3-6 Effects of introducing ICT system

&'� �� (�� ) ��

"��# �� *�� (��

�� *��

� ) �� #��+�#�� ##��

!� �� )�� #��

��

�� ,�� #��-��. �� . �� (��/

0��1�� ) ��

2��1�� ,�� . ��3/ �� #�� ,�3�3. �� 4 ��/

&�� #�� . #��#��. �� ) ��

2��4 � #��#�� ) �� ,�3�3.��1�� #�� 4�� )�� #��/

Reducing costs/improving operational efficiency

Expanding sales/increasing added value

61.2

48.4

33.5

57.8

13.5

64.1

68.0

50.5

41.8

68.8

66.2

61.0

81.7

47.3

64.1

67.9

62.4

63.8

73.6 59.8

��

��

��

��

��

5*�� 4 ��

� #��

��

� #��

#��

*��

��

��

#��

"�� 2�� #��

2��

� ��

�� #

� #��

2��

� #��

2��

� ��

55.1

41.6

55.0

58.8

51.743.1

50.270.1

63.3

47.6 35.835.8

24.524.5 42.142.1

36.336.326.626.6

29.229.2

35.8

24.5 42.1

36.326.6

29.241.159.9

41.933.5

�� !�� (6(6 �� (6(� ��7 �� ) 8�� #�� ,$�� /

9 )�� #�� #�� 4�� :��

��; � :� � �� 3;

9 )�� #�� #�� 4�� :�� 4��

��; � :� � �� 4�� 3;

Ch

ap

te

r1

the United States (Figure 1-3-7).The percentages of companies that introduced ICT

systems for “reducing costs/improving operational effi-ciency” and “expanding sales/increasing added value”were the highest in the United States, followed by Japanand the Republic of Korea (Figures 1-3-8 and 1-3-9).

The efforts toward increasing the effectiveness ofICT system investment were the most advanced in theUnited States, followed by the Republic of Korea andJapan (Figure 1-3-10).

The actual effects of introducing ICT systems were thehighest in the Republic of Korea, both in terms of “reduc-ing costs/improving operational efficiency” and “expand-ing sales/increasing added value” (Figure 1-3-11).

2 Expansion of E-CommerceWith respect to B2B e-commerce, 42.8% of compa-

nies “procure goods/services from companies via theInternet (procurement)” and 27.0% of companies “sellgoods/services to companies via the Internet (sales).” Inthe United States, procurement is implemented by 68.6%of companies and sales by 34.4%, while in the Republicof Korea, procurement is implemented by 44.5% of com-panies and sales by 22.2%. The implementation rates forprocurement and sales are both high in the United States.

As for B2C transactions via PC Internet in Japan,28.9% of companies are “currently implementing” and18.3% are “scheduled to implement or considering imple-mentation.” With regard to e-commerce via mobile

phones, 9.1% of companies are “currently implementing”and 25.6% are “scheduled to implement or consideringimplementation.” The implementation rate of e-com-merce via mobile phones is one-third of that via PCs, butsince many companies are “scheduled to implement orconsidering implementation,” e-commerce via mobilephones is expected to come into wider use in the future.Most of the companies that answered “currently imple-menting” or “scheduled to implement or consideringimplementation” for e-commerce via mobile phones alsoanswered “currently implementing” or “scheduled toimplement or considering implementation” for e-com-merce via PCs, so companies that implement both e-com-merce via PCs and mobile phones are likely to increase inthe future. In the United States, the implementation rateof e-commerce via PCs is higher than in Japan and theRepublic of Korea, and the situation in the Republic ofKorea is similar to that in Japan (Figure 1-3-12).

3 Comparison of ICT use amongJapan, the United States, and theRepublic of Korea

The rate of introducing video conference systems isthe highest in the United States at 76.4%, followed byJapan (50.8%) and the Republic of Korea (32.6%). Theutilization rate of mobile phones is around the same inJapan and the United States at a little less than 70%, andit is 29.6% in the Republic of Korea.

The rate of introducing telework is the highest in the

23

Figure 1-3-7 Comparison among Japan, the United States, and the Republic of Korea as to the introduction of ICT systems by type of operations

��

��

�

�

!�

"�

#�

$�

%�

&�

'�

(�

) *��+,��-�

.��

��

��-��

.��,��

��-

.��* ,��+��

��*�+��*�

��

��

/��+��-

��-�+��*��

��-

��

��-

0�� 1 234

70.971.8

63.466.568.8

58.4

72.574.0 74.2

64.2

70.7

60.2

70.767.062.5

66.3 66.1

58.5

52.4

72.0

52.2

81.6 81.985.3

81.8 80.885.4

49.6

55.749.5

75.271.1 70.0

Ch

ap

te

r1

24

��

�

!�

"�

#��

Figure 1-3-8 Purpose for introducing ICT systems (reducing costs/improving operational efficiency)

$��

��

��

$��

��

$�� %��

��

&��

'��

(��

��

��

��

)�� )��

$��

��

��

$��

��

$�� %��

��

&��

'��

(��

��

��

��

*�� +,-�� *�� +,-��

75.6

81.8

73.6

79.7

69.771.1

80.0

75.4

69.3

77.2

78.6

74.174.1

78.278.2

69.769.768.768.7

54.054.0

59.859.8

74.1

78.2

69.768.7

54.043.964.6

59.8 36.2

45.4

60.0

60.8

64.3

54.748.3

36.260.2

59.7

45.6

45.8 58.4

69.4��

�

!�

"�

Figure 1-3-9 Purpose for introducing ICT systems (expanding sales/increasing added value)

60.9

45.7

50.5

57.2

67.7

73.677.4

43.3

38.2

48.6

49.8 36.7

22.622.612.012.0

29.229.219.319.318.118.124.824.8

20.220.222.623.7

28.9

37.4

54.259.8

7.66.5

12.0

24.6 29.219.318.124.8

32.0

38.150.3

12.9

11.614.520.2

62.3

71.5

75.0

70.8

57.6

71.0

79.477.8

83.2

51.743.170.1

63.3

49.2

74.3

65.5

56.6

Figure 1-3-12 Implementation of e-commerce via PCs/mobile phones

��

��

��

��

! " # $ %

28.9 3.9 14.4 52.9

40.2 4.9 6.3 48.6

24.9 8.3 12.4 54.5

9.1 5.1 20.5 65.3

12.7 2.2 13.7 71.4

8.4 8.2 14.8 68.6

&'��

(��

)��

��*

+,-

)��

��*

+,-

&'��

��

Reducing costs/improving operational efficiency

Expanding sales/increasing added value

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

*�� +,-�� *�� +,-��

74.1

78.2

69.768.7

54.0

59.8

22.612.0

29.219.318.124.8

20.2

��

�

!�

"�

#��

81.6

91.0

62.362.3

71.571.5

75.075.0

70.870.8

57.657.6

71.071.0

79.479.477.877.8

83.283.262.3

69.3

79.2

81.285.9

71.5

88.575.0 61.2 81.7

61.0

47.3

64.167.9

62.4

63.8

73.659.8

70.892.2

71.0

57.6

71.0

79.477.8

73.6

83.2

77.1

Figure 1-3-10 Efforts toward increasing effectiveness of ICT system investment

Figure 1-3-11 Effects of introducing ICT system

��

�

!�

"�

41.655.0

58.8

51.751.743.143.170.170.1

63.363.3

49.249.2

74.374.3

65.565.5

51.743.150.2

70.1

63.3

47.6

55.1 49.649.2 74.3

74.3

63.4

50.8

63.5

78.8

74.2

62.8

70.1

56.656.656.6

65.5

51.341.445.8

61.7

58.6

36.9

44.9

�� '�� #./." �� #./.##0 �� &�� &) *�� %� &�� 1(�% ��2

34�� .�� %�� &) ��

�� .��

$��

�&) �� %�� %�� 5��

'�� &)�� %��

��

�� 1�� 6��%��7 ��7 �� .��%��2

+��8�� &) ��

��8�� 1�� 7 ��92 � �� 1�9�97 �� 2

3�� %��7 ��7 �� &) ��

�� &) �� 1�9�97��8�� &)�� 2

: )�� ;��

��< �� ;�� 9<

: )�� ;��

�%��< �� ;�� %��9<

Ch

ap

te

r1

United States at 68.9%, followed by the Republic ofKorea (21.2%) and Japan (14.7%) (Figure 1-3-13). Therate of introducing open source software (OSS) as theserver OS is the highest in the United States at 33.0%,while the rate was 21.0% in Japan and the Republic ofKorea (Figure 1-3-14).

With respect to the shift from mainframe systems toopen systems, companies that “already conducted fullreplacement/[are] considering full replacement” accountfor 21.9% in the Republic of Korea, 20.1% in the UnitedStates, and 17.7% in Japan. Companies that “alreadyconducted partial replacement/[are] considering partial

replacement” account for 45.6% in Japan, 43.6% in theRepublic of Korea, and 36.4% in the United States.Companies “continuing to use mainframes” account for34.7% in the United States, 31.8% in Japan, and 26.0%in the Republic of Korea (Figure 1-3-15).

The utilization rate of ASP services is the highest inthe Republic of Korea at 24.4%, followed by the UnitedStates (20.5%) and Japan (12.6%), while that of iDC ser-vices is the highest in the Republic of Korea at 27.9%,followed by Japan (12.5%) and the United States(10.8%) (Figure 1-3-16).

25

Figure 1-3-13 Introduction of telework Figure 1-3-14 Introduction of OSS (Linux, FreeBSD, etc.) as the server OS

�� !�� "

#$��

��$��

��

%�� & ��

%��

'��(� )��*

#$��

%�� & �� $��

%�� $��

-" -". /. �. ,. 0. .. . /. �. ,. 0. ..

14.7

68.9

21.2 17.7 61.1

10.5 20.5

19.6 21.0

33.0 5.7 10.6 9.8 25.8 15.2

21.0 12.9 16.8 33.1 11.54.7

7.6 14.6 22.1 20.2 14.565.81��

��#

234

1��

��#

234

#$��

��$��

��

%�� & ��

%��

'��(� )��*

Figure 1-3-15 Status of the shift from mainframes to open systems

Figure 1-3-16 Status of use of ASP and iDC services

�� + �� ,� �� !�� "

#��

#$�� $$ ��$��

�� $$ ��$��

��

��

��

-" -". /. �. ,. 0. .. . /. �. ,. 0. ..

4.9

8.8 6.6 13.5 17.0 19.4 34.7

8.5 10.2 11.7 31.1 12.5 26.0

5.3 12.4 22.6 23.0 31.8

12.6

20.5

24.4 3.9

12.5 4.1

10.8 4.8

27.9 3.4 9.2 13.9 38.6 6.9

4.7 4.6 50.2 24.9

9.2 12.7 40.6 20.9

9.3 14.0 38.8 9.7

5.8

4.0 5.6 6.8 35.6 27.5

10.2 16.1 35.0 20.21��

��#

234

1��

��#

234

1��

��#

234

#�

5'

�

Ch

ap

te

r1

1 Progress of broadbandThe number of broadband subscribers reached 18.66

million at the end of December 2004, increasing by36.5% over the previous year. In this manner, broadbandis continuing to expand steadily (Figure 1-4-1). Amongthe broadband subscribers, 13.33 million subscribe toDSL, 2.87 million to cable Internet, and 2.43 million toFTTH. Thus, DSL subscribers account for 71.4% ofbroadband subscribers.

Looking at the transition in the quarterly net increaseof subscribers in 2003 and 2004, DSL subscribersdecreased from 1.377 million in the January-March 2003term to 522 thousand in the October-December 2004

term, while FTTH subscribers increased from 99 thou-sand to 401 thousand during the same period. Therefore,FTTH is expected to further spread in the future (Figure1-4-2).

When making international comparison of broad-band diffusion, the number of broadband subscribers in2003 was the highest in the United States with 27.15million subscribers, followed by Japan (14.92 millionsubscribers), the Republic of Korea (11.18 million sub-scribers), and China (10.52 million subscribers).Meanwhile, the broadband penetration rate in 2003 wasthe highest in the Republic of Korea at 23.3%, followedby Hong Kong (18.0%) and Canada (14.7%). The pene-tration rate in Japan was 11.7%, raising its rank to sev-

26

Section 4Network Infrastructure Supporting u-Japan

Figure 1-4-1 Transition in the number of broadband subscribers

��

��

��

��

�� !" �#$" �� %��" �� &�� '(

�

)"��

*�"��

*)"��

��"��

*+++

,��-.�� / (0��-, �� , ��-#�0� 1��-�� ,��-.�� (0��-, �� , �-#�0� 1��-��

��/��*��

�#$ ��!

2(�3 '�� '(

Figure 1-4-2 Net increase in the number of DSL/FTTH subscribers

��

�

/��

4��

+��

*"��

*")��

�#$

��!

0.222000

1,377

1,234

9721,043

925

206 248

922

615

274401

685

522

99 153230

220

707800.20.9860

2,3801,4602683,870

7,020

2,070310309,430

11,200

2,580

1,14030

13,330

2,870

2,43030

14,950

18,660

Ch

ap

te

r1

enth place from ninth place in 2002 (Figure 1-4-3). When the DSL and cable Internet fees in various

countries are compared by converting them into fees per100 kbps, the fees in Japan are the lowest at 0.06 dollars,followed by the Republic of Korea (0.24 dollars),Sweden (0.24 dollars), and Taiwan (0.44 dollars)(Figure 1-4-4).

2 Progress of mobile communica-tions

The number of mobile phone subscribers at the endof FY 2004 was 87 million (increasing by 6.7% over theprevious year), continuing to increase but slowing down.The number of mobile phone Internet (Internet accessservices using mobile phones) subscribers was 75.15million (increasing by 7.8% over the previous year),accounting for 86.4% of mobile phone subscribers(Figure 1-4-5).

With regard to third-generation mobile phones, theNTT DoCoMo group started W-CDMA services inOctober 2001 for the first time in the world, then theKDDI group started CDMA2000 services in April 2002

and J-Phone (currently Vodafone) started W-CDMA ser-vices in December of the same year. The number ofthird-generation mobile phone subscribers at the end ofFY 2004 reached 30.35 million (increasing by 81.8%over the previous year), accounting for 34.9% of mobilephone subscribers (Figure 1-4-6).

The rate of Internet users using wireless LAN is17.1%, exceeding the 15.1% in the United States and the7.3% in the Republic of Korea.

3 Progress of IP networksThe utilization rate of IP phones in households

increased by 5.4 points from 7.3% in 2003 to 12.7% in2004. In addition, up to 69.1% of households plan theintroduction, so IP phones are expected to spread furtherin the future (Figure 1-4-7). As for the toll-cutting effectof IP phones, 46.0% of the users recognized a toll-cuttingeffect, while 16.6% recognized no changes in tolls(Figure 1-4-8).

The communications services that are most widelyused as trunk systems for corporate communications net-works are “IP-VPNs” at 24.7%, followed by “Internet

27

Figure 1-4-3 International comparison of the number of broadband subscribersand the penetration rate (2003)

Figure 1-4-4 International comparison of broadband fees (fees per 100 kbps; 2003)

��

��

�� !�� "#�$ #%� !��&�� "�&��& ��&�� '��

�

(

��

�(

'�

'(

��

��)

*��

+,-

�.��

#��.

��

/��-��

0��

1��

��)

0%��

2��3

�.�&4��

��"&�

�3

/��

�� -

*��

+,-0%��

0��

2��3

��

#��.

��"&�

�3��

/��

�-

/��-��

�.��

5��

" ��

�

(

��

�(

'�

'(

��

6�7 �� 1�� &��&�� &�

�

�

'

�

�

(

8

9

27.15

14.92

23.3

11.18 10.52

0.06 0.24 0.24 0.440.85

1.141.46 1.55 1.77 1.89

2.773.25 3.29

3.774.12

6.18

14.7

4.655.5 5.6

3.36

13.4

3.024.0 5.2

2.13 1.85

11.4

3.1

18.0

1.23 0.97

10.813.3 14.0

0.040.721.822.204.56

9.311.7

0.8

Ch

ap

te

r1

28

Figure 1-4-5 Transition in the number of mobile phone subscribers

��

� ��

�� !�� " #�$ � �� %�&'( ��# �� # �� ( �� )

Figure 1-4-6 Transition in the number of third-generation mobile phone subscribers

� ��

�� *+

� ��

��

,

-,

.,

/,

0,

1,,

2��) 1333 2��) -,,, 2��) -,,1 2��) -,,- 2��) -,,4 2��) -,,. 2��) -,,5

6�) � ��

,

5

1,

15

-,

-5

4,

45

7��82� �82�-,,,

6�) � ��

41.53

00.089

0.05

51.14

7.50

61.14

34.57

69.35

51.93

75.94

62.46

81.92

69.73

87.00

75.15

0.089

-,,1

6.81

0.36

7.16

-,,-

13.51

3.18

16.69

-,,4

17.93

12.42

30.35

-,,.

Figure 1-4-7 IP phone utilization rate for households

Figure 1-4-8 Toll-cutting effect of IP phones

��

��

��

��

��

��

��

��

��

��

� ��

� �� !� ��

0� �� 4�� )� ��/ �%�%5 �� %�%!6 �$'1 '�** ��/ �/�� 2�� 0 �3��

7 2�� (�� 8(�� 9 ��/ ��

�� / �3��:

12.7

7.3 89.4 3.3

69.1 13.0 5.2��

��

,�.

10.3%

12.5%

11.1%

12.1%16.6%

32.7%

4.7%

Ch

ap

te

r1

VPNs” (18.3%) and “dedicated lines” (15.1%). Comparedto 2003, the use of “IP-VPNs” and “Internet VPNs”increased, while the use of “dedicated lines” and otherservices decreased. This suggests that IP networks arebeing increasingly used as trunk systems (Figure 1-4-9).

4 Diffusion of terrestrial digitalbroadcasting

Terrestrial digital broadcasting, which was launchedin three metropolitan areas (Kanto, Chukyo, and Kinki)in December 2003, has been steadily expanding its ser-vice areas. The shipment volume of receivers supportingterrestrial digital broadcasting also increased rapidly.The cumulative shipment volume at the end of April2005 reached 4,335,000 units (Figure 1-4-10).

5. Japan’s advantage in informa-tion and communications equip-ment and technology

The areas of ICT R&D that should be particularlyemphasized in promoting construction of a ubiquitous

network society in the future are: (i) new-generation net-work technology; (ii) universal communications technol-ogy; and (iii) ICT for safety and security.

A survey was conducted on Japanese ICT engineersconcerning the advantages of Japan, North America,Europe, and Asia in major core technology in these threeareas. As a result, many responded that Japan had anadvantage in FTTH, next-generation mobile phones,real-world networked robots, high-definition imagingtechnology, home networks, and mobile equipment tech-nology, while many responded that North America hadan advantage in the area of ICT for safety and security,such as IP traceback technology, automated managementof network building/operation, and adhoc sensor net-works (Figure 1-4-11).

29

"�� #�� $�%&��

'�� % (

$�� &�� )��*� ��

+�� ,��-� ��. �� /��

0� �� $'1 '�** ��/ �/�� 2�� 0 �3��

��

��

� �� !� �� ,�.

Figure 1-4-9 Services used for trunk systems of corporate communications networks

13.8

12.4

24.7 18.3 15.1 16.43.2 4.1

0.5

1.8 2.1

22.6 13.8 21.8 6.5 7.2 8.42.4 3.71.3

Figure 1-4-10 Shipment volume of receivers supporting terrestrial digital broadcasting

��

$ �� %

'

(

)

*

+

,

��

��

-��. )''*

��./0��.

)''+

��./��.

)''+

��./��.

)''+

1��./-��.

)''+

��./0��.

)'',

��. )'',

0.7361.072

0.336

1.588

0.516

2.277

0.689

3.162

0.885

3.845

0.683

4.335

Ch

ap

te

r1

30

Figure 1-4-11 International comparison of the advantages in ubiquitous network related technology

�� !��"��# ��

$&%' )' +' 2' 3' (''

�� !�� 1�� -��4� #��"

!�"/�� "��#

��

��

��

��

��

!�5�/��

6��7

1�� " �� 8��

9��

!�5�/�� " �� "��#�

�� /�� $( :��% " �� ;�!8��! ��

��8 ��

<��

=��/"�� "��#��

7�� "��#�

7 ��/��

0��

�-! �� /��

�� 8��

=6�- ��

��

- � ��

��

-�� "��#�

�� "��# �� 8��

�� "��#�

�� # ��

�� "��#�� 5��/� ��

62.3

54.3

33.3

27.5

27.5

24.8

22.1

21.4

20.0

15.2 8.7 13.00.7

23.8 20.01.9

42.3 23.40.9

54.2 2.3 0.8 15.3

35.3 9.8 26.51.0

52.1 1.7 4.3 17.1

57.5 19.50.9

47.3 27.73.6

40.0 11.3 28.7

73.7

69.2

67.3

63.2

60.7

42.3

41.5

19.8

17.0

8.5 16.11.7

19.5 10.50.8

13.3 19.5

14.9 15.30.95.3

22.4 16.8

35.8 20.31.6

41.5 14.61.5 0.8

55.4 24.00.8

58.5 22.61.9

27.4

23.3

15.8

14.2

8.1

52.2 19.50.9

48.3 27.50.8

62.4 19.81.0 1.0

62.5 18.34.2 0.8

71.7 19.21.0

Ch

ap

te

r1

1 Safe and secure ICT use(1) ICT security incidents experienced by individualsand companies

Among PC Internet users, 86.5% experienced ICTsecurity incidents during 2004. The most frequentlyoccurring incident was “spam” at 72.4%, followed by“discovery of a virus” (43.1%) and “virus infection”(20.3%).

A similar trend was observed in the United Statesand the Republic of Korea as well. About 90% of PCInternet users experienced some ICT security incidents,and the most frequently occurring incidents were in theorder of “spam,” “discovery of a virus,” and “virusinfection.” Looking at the individual types of incidents,“virus infection” was most frequently observed in the

Republic of Korea at 44.8%, followed by the UnitedStates at 35.8% and Japan at 20.3%. In the United States,where phishing has grown into a social problem recently,“phishing mail” was experienced by 36.7% of users,which is higher than the 9.7% in Japan and the 11.6% inthe Republic of Korea (Figure 1-5-1).

(2) Virus and unauthorized accessAccording to two companies aggregating and pub-

lishing virus incident reports, the number of virus inci-dents reported during 2004 was 121,404, which is aboutthree times higher than the 43,384 incidents observedduring 2001 (Figure 1-5-2). In 2004, new viruses includ-ing “Netsky” and “Bagle” spread widely.

31

Section 5Challenges Toward Achieving u-Japan

Figure 1-5-1 ICT security incidents experienced by PC Internet users

��

��

��

��

!��"��#� ��

��

�$��$��#

��

*�� $��+��

, $��

�� -��

./0 ��

�1�

&

%&

)&

2&

3&

'&&

Figure 1-5-2 Transition in the number of virus incidents reported

5��

*�6

7,8

72.4

84.5

72.0

43.148.5

57.5

20.3

35.8

44.8

11.94.611.9 9.7

36.7

11.65.2 4.8

10.5

0.41.8

0.4

13.5 9.8 10.3

%&&' %&&% %&&( %&&)

��

��

Figure 1-5-2 Transition in the number of virus incidents reported

��

&

4&&&&

'&&&&&

'4&&&&

43,38474,978 68,624

121,404

Ch

ap

te

r1

Among Internet users, 93.0% take some measureagainst viruses and unauthorized accesses. The measuremost frequently taken is “using anti-virus software” at63.1%, followed by “using caution when openingattached files and HTML e-mail messages” (57.4%).

A similar trend is observed in the United States andthe Republic of Korea as well. More than 90% of

Internet users take some measure, and the most frequent-ly taken measures include “using anti-virus software”and “using caution when opening attached files andHTML e-mail messages.” Overall, Internet users in theUnited States are taking the strongest measures, followedby users in Japan and users in the Republic of Korea(Figure 1-5-3).

32

Figure 1-5-3 Anti-virus measures and measures against unauthorized access taken by Internet users

��

��

��

��

��

��

�!�� " ��#

��

$��% ��

��

&� �� !��

Figure 1-5-4 IT security measures taken by companies

. /. 0. 1. 2. 3..

4��

��*

$�5

��6 �� % �� &��!� �� 7� 8� �� 9�� %�

�� ;:<8 ��

��

<!�� % ��!��

63.185.6

73.557.4

67.031.3

57.363.5

37.940.9

27.515.5

32.850.5

23.926.0

38.211.5

24.616.5

11.224.5

33.118.317.8

22.616.8

8.825.6

7.47.6

22.47.3

0.81.9

0.17.04.79.3

Figure 1-5-4 IT security measures taken by companies

��

�� !��

'�� %��

��

(�� % �) ��

*��%�� % ��

+�� % ��%

$��

(�� % ��

�� ,��

'��%�� !�

(��

�� % ��

�� !�� %��

�� ,% �� " ��#

��

)��-� !��

&� �� !��

. /. 0. 1. 2. 3..

4��

��*

$�5

��6 �� % �� (�� (: �� % (�� 9�� %�

�� !�� ( ��

�� %�� % �� !��

(�� % �� %

75.386.8

78.070.2

86.264.9

59.174.4

39.858.3

85.580.1

56.080.0

63.753.4

72.167.6

52.080.1

39.541.8

62.742.041.3

70.142.0

38.267.1

40.827.329.327.725.4

49.915.9

23.655.8

21.720.6

33.627.0

20.310.0

24.214.1

27.422.4

13.050.0

43.50.30.50.82.9

0.60.00.91.51.6

Ch

ap

te

r1

Companies taking some measure against ICT securi-ty incidents account for 99.1%. The most frequentlytaken measure is “installing a virus-checking program onthe PC or other terminals” at 75.3%, followed by“installing a virus-checking program on the server”(70.2%), “educating employees on the matter” (59.1%),and “setting up firewalls” (58.3%).

Most companies in the United States and theRepublic of Korea also take some measures. When com-paring the status of implementation of concrete mea-sures, the implementation rate is high for U.S. compa-nies in most of the measures. In particular, U.S. compa-nies are advanced in operational and institutional mea-sures such as “educating employees on the matter,” “for-mulating a security policy,” and “conducting securityaudits” (Figure 1-5-4).

(3) SpamIndeed, 86.6% of PC users and 72.6% of mobile

phone users have received spam in the past. While morethan 70% of PC and mobile phone spam recipientsreceive five or less spam messages per day, more than10% of PC spam recipients receive 11 messages or moreper day.

In the United States, only 8.2% of mobile phoneusers have received spam because mobile phone e-mailis not in wide use, but 97.6% of PC Internet users havereceived spam, and nearly half of them receive 11 spammessages or more per day. In the Republic of Korea,94.6% of PC Internet users and 79.0% of mobile phoneusers have received spam, and the situation is generallythe same as in Japan (Figure 1-5-5).

(4) Protection of personal informationAmong Internet users, 51.5% take some measures

for protecting personal information. Specifically, themost frequently taken measure is “avoid disclosing per-sonal information on the Internet” at 33.9%, followed by“avoid careless downloading of programs” (25.1%) and“refrain from entering credit card numbers” (23.7%)(Figure 1-5-6).

The Law Concerning the Protection of PersonalInformation came into force in April 2005, and businessoperators handling personal information became obligat-ed to use personal information only for the specified pur-poses of use, acquire such information through appropri-ate means, and take measures for safely managing such

33

Figure 1-5-5 Number of spam messages received per day

Figure 1-5-6 Internet users’ measures for protecting personal information (multiple responses possible)

��

�� !""# ��$$�� %��&� '��

�� ! � ( $��&�� )�� * $��&�

+ � *" $��&�� ** $��&�� $��

�,�

�,�" !" #" +" -" *""

" *" !" ." #"

/��

%�0

123

/��

%�0

123

PCs

Mobile phones

0�� & �� 4��$� �� )� ��

0�� & �4 ��&��$�

1�4�� 4��$ �� & �� $��

1�4�� 4��$ ��& � ��5� &�� 6

%�� 7�� 4 ��

2 )��

�� $��

��

13.4 36.2 26.1 8.9 15.4

2.4 5.1 23.7 18.9 49.8

5.4 10.5

27.4 47.9

21.0 33.8

33.9

25.1

23.7

17.6

5.3

2.4

27.6

20.9

35.8 4.8 4.6

91.8 4.2 1.7 0.5 1.8

18.1 3.4 3.2

30.5 24.3 29.4

Ch

ap

te

r1

information.In these circumstances, companies’ efforts for pro-

tecting personal information have made progress. Whencomparing companies’ methods of managing personalinformation in FY 2003 and FY 2004, greater efforts areobserved for all items. In particular, a considerably largernumber of companies have come to “formulate personalinformation management rules and notify them to personsconcerned” (49.7%) and “limit use and viewing of cus-tomers’ personal information” (40.5%) (Figure 1-5-7).

On the whole, measures against information leakageby insiders have also made progress. The most frequent-ly taken measures are to “limit entrance into the serverroom” (74.7%) and “limit the removal of laptop PCs andOA equipment from premises” (49.7%) (Figure 1-5-8).

(5) Challenges toward a ubiquitous network societyThe “Policy Roundtable for Realizing a Ubiquitous

Network Society” divided the challenges in the shadowof a ubiquitous network society into ten major divisionssuch as privacy protection and security, and listed tenindividual challenges for each division, presenting a total

of 100 challenges. Then, in order to clarify the prioritychallenges among these 100, it conducted a question-naire survey on experts and extracted priority challengesbased on two perspectives: the degree of impact on soci-ety and the degree of insufficiency of measures. As aresult, 21 priority challenges were extracted including“vulnerability of ICT networks,” “regional gaps inadvanced services,” and “illegal business practices usingnetworks” (Figure 1-5-9).

While a ubiquitous network society has positiveeffects such as enhancing safety, security, and conve-nience in people’s lives, it also has negative effects suchas the possibility of generating new problems related toprivacy or security. Therefore, Internet users in Japan,the United States, and the Republic of Korea were askedwhether or not construction of a ubiquitous networksociety, which has both positive effects and negativeeffects, should be promoted. In the three countries, themost chosen answers were those in support of promotingconstruction of a ubiquitous network society, but differ-ences were observed in awareness in each country. InJapan, the percentage of respondents who answered

34

Figure 1-5-7 Companies’ methods of managing personal information (multiple responses possible)

Figure 1-5-8 Measures against information leakage by insiders (multiple responses possible)

��

��

��

��

��

��

�� ! ��" ��

��

��

�� #��

��

$ ��

$ ��%��

&'(

&'(

)�� *�� +�,�- �� +�,�./ )�� )�� 0�� 1� �� )��

*2 3445 *2 3446 *2 3445 *2 3446

4 34 64 74 .4 4 34 64 74 .4

*��

��

�� %�� 8 ��

9��

��

��

:�� %��

��

:��

:��

$ ��%��

56.6 73.174.7

41.349.7

29.535.3

28.332.0

19.628.7

24.024.2

10.714.0

0.70.4

05.1

09.4

13.92.5

66.9

25.849.7

25.340.5

13.022.4

18.321.1

3.06.8

0.90.8

0.93.1

01.4

14.60

3.06.2

Ch

ap

te

r1

35

Figure 1-5-10 Approval/disapproval for construction of a ubiquitous network society

��

� & (

�� ##�� $��)��&� ��&� �� $� �� $�� )� ��*

�� ##�� &�� $� �� $�� )� �� #�� & $� �� )� � �� &� �� ##�� *

��&� �� ##�� &�� $� �� $�� )� ��*

+�� *

�,�

-��

'�.

"/0

1 21 31 41 51 611

12.23.875.18.8

31.923.439.05.6

18.03.455.223.4

Figure 1-5-9 Priority challenges toward a ubiquitous network society

�� !�� "�� # $� �� "�� #�� "��%��& � '��(��

�,�

�,�

+�&�� # ��##�� # )��

+�

&��

��

#�)

��

�

��

��

��

1 61 21 71 31 811

61

21

71

31

81

41

Spam

Copyright protection of digital assets

Regional gaps in advanced services

Safety of electronic payment Vulnerability of ICT networks

Computer virusesIllegal business practices using networks

Convenience of e-government

Privacy in medical care

Impact on developmentof youth

Standardization of operations among local governments

Utilization of ICT in education

Priority of ICT in Social capital improvement

Lack of skillful ICT human resources

Ethics in ICT research and developmentICT security awareness among general users

Intellectual property strategy

Gaps in e-local governments

Lack of secondary use of contents

Utilization of ICT in medical care

Protection of personal information owned by publicinstitutions and business operators

Figure 1-5-9 Priority challenges toward a ubiquitous network society

Ch

ap

te

r1

“positive effects are larger, but the construction shouldbe promoted carefully, taking the necessary time to pre-vent negative effects” was 75.1%, which is higher thanin the United States and the Republic of Korea. In theUnited States, the percentage of respondents whoanswered “negative effects are larger, so the constructionshould not be promoted” was 23.4%, which is consider-ably higher than in Japan and the Republic of Korea. Inthe Republic of Korea, the percentage of respondentswho answered “positive effects are overwhelminglylarge, so the construction should be actively promoted”was 23.4%, which is higher than in Japan and the UnitedStates (Figure 1-5-10). This indicates that careful pro-motion is supported in Japan, a considerable number ofpeople oppose the construction in the United States, andproactive promotion is supported in the Republic ofKorea.

Furthermore, those who answered that constructionof a ubiquitous network society should be promotedwere asked about measures against the negative effects.In Japan, the United States, and the Republic of Korea,the most chosen answer was “while the government andcompanies need to take institutional/technical measuresin advance in order to prevent negative effects, theresponsibility that users take for themselves is also indis-pensable.” Meanwhile, in Japan and the Republic ofKorea, more respondents answered “the government and

companies need to take ex ante completeinstitutional/technical measures in order to prevent nega-tive effects, and should avoid relying on user responsi-bility as much as possible” than in the United States. Inthe United States, more respondents answered “it will besufficient to take ex-post measures whenever a problemarises” than in Japan and the Republic of Korea. Theawareness of user responsibility tends to be stronger inthe United States than in the other two countries (Figure1-5-11).

36

Figure 1-5-11 Opinions on measures against the negative effects of a ubiquitous network society

��

& �� ()�� *�� * ��'

�� +��*�� *�� , �� *�� +� �� # �� *�� '

�� +��*�� *�� ( �� *�� , �� *�� +� �� # �� + �� *�� '

"�� '

�-�

.��

/�!

012

4 ;4 :4 94 74 544

3.6

14.4

8.7

56.0 36.5 4.0

58.5 21.3 5.8

51.8 37.2 2.3

Ch

ap

te

r1

2 Current status of the digitaldivide

Looking at the diffusion of major broadband servicesby population of the municipality, ADSL is diffused to100% of municipalities with a population of over 50,000,92.3% of those with a population of over 5,000 and up to10,000, and 54.7% of those with a population of 5,000 orless. Meanwhile, FTTH is diffused to 93.1% of munici-palities with a population of over 50,000, but only to11.6% of those with a population of over 5,000 and up to10,000, and 3.0% of those with a population of 5,000 orless. In this manner, there are gaps in diffusion betweenmunicipalities according to their population, and thegaps are considerably wide for FTTH (Figure 1-5-12).

3 Backbone circuit(1) Surge in Internet traffic

The MIC conducted an aggregation and trial calcula-tion of Japan’s Internet traffic data with the cooperationof seven ISPs (September - November 2004) and theacademic world.

The traffic of broadband subscribers has been con-stantly increasing. Since the difference between thedownloading traffic (traffic from ISPs to subscribers)and the uploading traffic (traffic from subscribers toISPs) is becoming smaller, ISPs can no longer constructtheir networks with a premise that “general users mainlyuse downloading services” (Figure 1-5-13).

Since traffic exchanges between the seven ISPs andother ISPs are more frequently conducted through pri-vate peering, etc. than through major domestic InternetExchanges (IXs), the traffic data for major domestic IXs

are insufficient for estimating the total amount of trafficexchanged (Figure 1-5-14).

When the total amount of traffic of broadband sub-scribers in Japan was estimated based on the seven ISPs’41.1% share of the total “In” traffic at the major domes-tic IXs (the total amount of traffic coming in from sub-scribers to the major domestic IXs) and the 133.0 Gbpstraffic from the broadband subscribers of the seven ISPs,it was assessed that traffic exceeding 300 Gpbs (133.0Gpbs / 41.1% = 323.6 Gpbs) is moving on the Internet.

(2) Concentration of Internet traffic exchanges in TokyoAccording to a questionnaire survey conducted by

the MIC on the 14 major ISPs (February 2004), IXs’total circuit capacity for public peering was 230.4 Gpbs,out of which about 80% were concentrated in Tokyo.Meanwhile, the total circuit capacity for private peeringwas 278.2 Gpbs, out of which about 90% were concen-trated in Tokyo.

Due to the concentration of traffic exchanges inTokyo, various problems are being pointed out, such asdeterioration of broadband services in the region and thevulnerability to cyber attacks and large-scale disasters.While many major ISPs and IXs conduct trafficexchanges not only in Tokyo, but also in Osaka, etc. forrisk management, it would also be necessary to examinethe technical problems in shifting to a distributed net-work mode in order to achieve stable operation of thewhole Internet.

37

Figure 1-5-12 Diffusion of broadband services by population of the municipality (as of the end of March 2005)

Diffusion of FTTH services Diffusion of ADSL services Diffusion of cable Internet

� �� !"��# $��%# �� &� �� # �� $�!'

�-�

1�� 3#444 �� 54#444�678 *��

1�� 54#444 �� 34#444�5#579 *��

1�� 34#444�:67 *��

3#444 �� 969 *��

4 ;4 :4 94 74 544 4 ;4 :4 94 74 544 4 ;4 :4 94 74 544

93.1

36.5

11.6 88.4

3.0 97.0

63.5

6.9 80.8

30.4

18.0 82.0

13.3 86.7

69.6

19.2100

99.7

92.3 7.7

54.7 45.3

0.3

!��

Ch

ap

te

r1

38

Figure 1-5-13 Traffic by type of subscribers (transition in the average monthly traffic from September to November 2004; Gbps)

��

��→ ��→ ��

��→ � �→ ��

Broadband (DSL, FTTH) subscribers of seven ISPs

Other (dial-up, dedicated line, data center) subscribers of four ISPs

��

��→ ��→ ��

��→ ��→ � ��

��

��→ ��→ ��

��→ ��→ ��

Seven ISPs’ traffic exchanges through major domestic IXs

Seven ISPs’ other modes of traffic exchanges with domestic ISPs

��

��→ ��→ �

��→ ��→ ��

� �→ ��→ �� Seven ISPs’ traffic exchanges with overseas ISPs ��→ � ��→ ��

Figure 1-5-14 Traffic exchanges between ISPs (transition in the average monthly traffic from September to November 2004; Gbps)

� �� !��!�� "�� #�� $ �%&� #�'(�� $)

*��(� �� "�� #�� $ �%&� �� !��!�� #��*�(�� $�

� �� "�� %&�) *��(� �� "�� %&��

Documents

Feature: Stirrings of u-Japan