Market Environment

According to the Japan LP Gas Association, the demand for LP gas in Japan is projected to be approximately 11.89 million tons in fiscal year 2025, representing a 0.8% decrease compared to the previous year. This decline is attributed to the widespread adoption of all-electric homes and the expansion of the city gas market. In particular, the increase in all-electric residences has significantly suppressed LP gas demand, and this trend is expected to continue going forward.
There are more than 15,000 sales operators, a very large number; most of them are small and medium-sized local retailers who have recently been facing a serious issue of labor shortages. Especially in delivery operations, the aging of skilled personnel is progressing, making training for new employees and flexible reassignments of staff urgent tasks. Going forward, further consolidation of retailers through mergers and acquisitions (M&A) is expected to accelerate movements such as the following:

• ・Progress in acquisitions and mergers of small and medium-sized operators by large companies
• ・Increase in business format consolidation aimed at improving efficiency and service quality
• ・Advancement in customer management and supply-demand forecasting by IT and IoT

These developments are expected to continue, and acquiring human resources from other companies through M&A is anticipated to be a means of strengthening competitiveness and maintaining a stable management foundation.

According to the Institute of Energy Economics, Japan, the domestic city gas sales volume in fiscal year 2025 is expected to reach approximately 38 billion cubic meters, representing a 1.4% increase compared to the previous year. The number of contracted customers is estimated to be around 30 million. Since the full liberalization in 2017, competition has intensified in pricing plans and services targeting small-volume customers such as households, small retail stores, and offices.
The notable trends include the following:

• ・As of October 2025, there are 189 city gas operators ranging from large corporations to local small- and medium-sized enterprises.
• ・Although large-volume customers such as large factories and corporate offices still hold a high share of contracted volume, the proportion of services targeting small-volume customers is increasing.
• ・Against the backdrop of policy pressure to reduce carbon dioxide emissions, the expansion of the use of natural gas and renewable energy is being promoted.

Going forward, progress in business efficiency and customer satisfaction is expected through the promotion of smart meter installation and digitalization.

According to the Agency for Natural Resources and Energy, Japan’s domestic electricity retail market in fiscal year 2025 is expected to increase by 560,000 kW from the maximum electricity demand of 157.6 million kW in fiscal year 2024. Additionally, the green electricity retail market is anticipated to grow further from 903.2 billion yen in fiscal year 2024. Since the full liberalization of the electricity market in 2016, approximately 150 companies will have entered the market by the end of 2025, with the number of contracts showing an expanding trend.
Key points of the market trends are as follows:

• ・In addition to the special high-voltage and high-voltage markets for large-volume customers, the number of switches in the low-voltage small-volume market is increasing, intensifying market competition. Consumer demand for lower prices is particularly notable.
• ・Despite impacts from population decline and energy-saving measures, overall electricity demand is on the rise due to new and expanded data centers and semiconductor factories driven by advances in AI technology.
• ・Fluctuations in Feed-in Tariff (FIT) rates and the introduction of the non-fossil certificate system, associated with the spread of environmentally conscious renewable energy, have made increasing the renewable energy ratio a key focus of business strategies.

In the medium to long term, it is required to promote an increase in the use of renewable energy and the introduction of energy-efficient technologies in line with carbon-neutrality goals, thereby reducing environmental impact and fulfilling corporate social responsibility (CSR).

The following risks are associated with the energy business as a whole:

To address these risks, it is important to strengthen risk management systems, promptly grasp policy trends, and continue investing in cybersecurity measures.

To adapt to a rapidly changing market environment and achieve sustainable business growth, the following multifaceted strategies are essential:

To build a flexible organizational structure that can respond swiftly to market changes, the following types of talent development are essential:

The advancement of AI technology is bringing significant transformation to the energy market.

Companies that actively adopt these technologies and promote operational efficiency as well as the creation of new services will maintain their competitiveness.

Japan’s energy market is entering a period of major transformation. In the LP gas market, business integrations involving M&A are progressing, while in the city gas and electricity markets, deeper liberalization and responses to carbon-neutral policies are becoming the keys to competition.
In addition, risk management has become more important than ever, making innovative business strategies leveraging AI and the development of highly skilled talent to support them indispensable. Accurately capturing changes in the market environment and providing sustainable and innovative energy services will determine future growth.

Our group's consumer information and communications market mainly consists of "Internet Service Providers (ISPs)," "mobile communications," and "Mobile Virtual Network Operators (MVNOs)“.
The domestic consumer information and communications market has remained robust, centered on ISPs, mobile communications, and MVNOs. In particular, the mobile communications market has seen accelerated adoption of 5G, with the number of 5G contracts surpassing 100 million in 2024. According to 2025 data, the number of 5G contracts exceeded LTE contracts for the first time, marking a clear generational shift (source: Ministry of Internal Affairs and Communications). Furthermore, the MVNO market has also grown in contract numbers backed by expanding IoT demand and affordable pricing plans, with increased diversification of services and intensified competition.

ISP Market

As of September 2025, the number of internet connectivity contracts (for fixed communications) reached approximately 42 million, representing about 1% increase year-over-year. The broadband connection rate at home has advanced to about 94.2% by 2024. While demands for higher speed and stability have increased, price competition remains intense, with differentiation progressing through cloud service integration and value-added offerings.

Mobile Communications Market

As of September 2025, the total number of contracts expanded to about 230 million lines, up about 4.5% year-over-year, yielding a penetration rate of 185.3% relative to the population. The population coverage rate of 5G services exceeded 98% in March 2024, accompanied by increased usage of high-definition video streaming and AR/VR applications. Carriers are responding to increasingly segmented customer needs through a variety of pricing plans and services.

MVNO Market

As of September 2025, the number of users grew to approximately 40.66 million, about 1% increase year-over-year. Low-cost pricing plans continue to support demand. Intense competition has been stimulated by new market entrants and existing operators through improvements in communication quality, as well as strengthening services related to IoT and smart home integration.

(Source: Ministry of Internal Affairs and Communications, “Information and Communications Statistical Database”)

In the corporate information and communications market, rapid diffusion of generative artificial intelligence (AI) and the company-wide penetration of digital transformation (DX) have driven explosive growth in cloud services, networks, and data center businesses.
The domestic cloud market has moved beyond merely cost reduction and remote work support phases to become an indispensable foundation for business transformation. The market size is expected to reach the significant milestone of 10 trillion yen in fiscal 2025, and further high growth is forecast after 2026 as demand grows for generative AI execution platforms (source: private research firms, etc.). Alongside this, advanced security measures based on zero trust principles and unified management of distributed data have emerged as top priorities for businesses.
Additionally, in the data center business, demand is tightening particularly for “hyperscale” data centers that support the massive computational resources essential for AI utilization. Large-scale capital investments by domestic and international companies are accelerating, transforming data centers from mere information repositories into “AI infrastructure” that supports society.

Our group’s corporate information and communications business, which offers integrated cloud, network, and data center services that underpin the rapid expansion of generative AI and accelerated DX, is enhancing its presence and significance in the market as an ICT partner supporting next-generation social infrastructure.

The main risks in the information and communications business include intensified competition, cybersecurity threats, and regulatory changes. It is important to implement the following measures to address these risks.

To adapt to rapidly changing market conditions and aim for sustainable business growth, the following business strategies are required:

In particular, in the information and communications business, there is a demand for personnel who possess technical expertise and skills, as well as adaptability to respond flexibly to change and creativity to drive innovation.

AI is bringing revolutionary changes across all areas of the information and communications market.

Based on these developments, AI utilization is becoming an indispensable pillar for gaining competitive advantage in the future.

Overall, Japan’s information and communications market is a field expected to sustain growth driven by the advancement of social infrastructure and business transformation in both the consumer and corporate sectors. In particular, the full establishment of 5G in mobile communications, diversification of MVNOs, and, on the corporate side, cloud services and data center businesses as the foundation for the generative AI era, will serve as core elements driving the market forward.
At the same time, earnest efforts to address challenges such as thorough risk management against increasingly sophisticated cyberattacks and development of highly skilled IT personnel proficient in advanced technologies are indispensable.
By comprehensively understanding these market trends and executing management strategies that flexibly incorporate cutting-edge technologies, companies can establish competitive advantage in a rapidly changing market environment and achieve improved customer satisfaction and maximized corporate value.

As of the end of March 2025, the total sales revenue of cable television operators (an estimated total for 334 operators affiliated with Japan Cable and Telecommunications Association) is estimated to be approximately 1.3282 trillion yen. Although the number of subscribers to traditional television is slightly declining due to the spread of streaming services and others, this is offset by the expansion of cable internet connection services and the like.

• ・The community-based television broadcasting business has about 31.88 million subscribing households, with a household penetration rate of approximately 52.0%, meaning that more than half of all households in Japan watch television via cable TV.
• ・Cable internet connection services have about 11.23 million subscribing households.
• ・Telephone services (including IP telephony) are adopted by over 200 cable operators nationwide, with about 8.57 million subscribing households.

（Source: Japan Cable and Telecommunications Association, "Cable Television Industry Report 2025"）

While traditional television viewing remains stable primarily among older generations, the penetration of online video viewing via smartphones and tablets is advancing, particularly among younger viewers.
With changes in viewers’ lifestyles, the role expected of cable TV has significantly shifted. In addition to traditional multi-channel broadcasting, there is a firmly established demand to comfortably enjoy video streaming services, such as Netflix and YouTube, on large TV screens. In response, establishing a hybrid viewing environment that seamlessly integrates broadcasting and telecommunications has become the new market standard.
Furthermore, regarding information gathering, trust and demand are rising for “hyper-local information” directly connected to viewers’ living areas, rather than vast amounts of information available online. Expectations are expanding for cable TV as a community platform supporting regional safety and security—through rapid dissemination of information during disasters and digitalization support for administrative services in collaboration with local governments.
Thus, the evolution from a mere “broadcast media” to a “comprehensive lifestyle support platform” that embraces individual viewing styles and solves community issues is a key trend driving the current market.

In today’s world where viewer lifestyles are undergoing dramatic change, enhancing individual convenience and finely customizing content to meet diverse needs is no longer a mere value-added service but a core element for maintaining and strengthening market competitiveness.
Moving beyond uniform “one-size-fits-all broadcasting,” leveraging AI to analyze viewing trends for personalization and offering unique value propositions that integrate broadcast, telecommunications, and regional services are key to building deep customer engagement.
By removing device and location constraints and continuously creating optimal viewing experiences that align with user expectations, cable TV solidifies its position as an indispensable platform in the rapidly evolving entertainment market as well as daily life.

The rapid global proliferation of video streaming services has dramatically transformed viewers’ lifestyles from traditional “real-time viewing” to “on-demand viewing,” allowing them to enjoy content anytime on their preferred devices. While the rise of online content has intensified competition in the existing broadcasting market, it also creates new growth opportunities for cable TV operators that provide high-speed communication infrastructure by serving as a platform that comfortably supports streaming services.

Rapid advancements in information and communication technologies and drastic changes in viewing styles bring new growth opportunities to the cable TV business but also pose management risks. For example, viewer attrition from traditional broadcasting services, increased competition with powerful domestic and international OTT services, and delays in adapting to next-generation communication technologies or diversifying revenue sources may affect future profitability.
Accurately grasping these market risks and swiftly promoting business structure transformation are critical challenges for sustainable corporate value enhancement.

To achieve sustainable growth in a rapidly changing market environment, it is essential to create unique value by leveraging a strong customer base and to pursue thorough digital transformation. While deepening community-based content to build trust forms the core, key strategies include accelerating the digital shift, differentiating in-house content production, and diversifying revenue streams by expanding into new areas such as the Internet of Things (IoT).
Additionally, advancing operational efficiency and sophisticated customer analysis by AI and DX is necessary to establish a position as the next-generation comprehensive lifestyle support platform.

The advancement of AI technology is influencing the cable TV market in the following ways:

Strategic use of AI is dramatically evolving all aspects of the business—from fundamental operational efficiency to the creation of new customer experiences. Accelerating the implementation of cutting-edge technologies is essential to deliver higher-quality, personalized next-generation services and establish a competitive advantage in the market.

Amid rapid changes in viewer needs driven by the rise of online video streaming services, the cable TV market is facing an unprecedented period of transformation.
In this environment, deepening collaboration with local communities based on our group’s strength in “community focus,” while simultaneously advancing next-generation content strategies centered on AI and digital technologies, diversifying revenue bases, and enhancing service sophistication, will be key to establishing and maintaining competitive advantage.

The bottled water market, supported by increasing health consciousness and diversified lifestyles, is projected to grow steadily, with an estimated market size of approximately 183.8 billion yen and a growth rate of 103% in fiscal 2025.
Amid the recent frequent natural disasters and rising disaster preparedness awareness, bottled water is also gaining importance as emergency stockpiled water, expanding demand as part of disaster preparedness measures for homes and offices. Especially valued is the convenience of immediately supplying safe and secure drinking water during disasters, making products with dual roles for everyday use and stockpiling highly noteworthy.
On the other hand, purified water dispenser systems are also on the rise. Influenced by consumers’ cost-saving mindset, switching from delivery-based to purified water dispensers, as well as differentiated pricing strategies in competitive sales, are key factors behind this trend (Source: Japan Delivery Water & Server Association, “Japan Delivery Water Industry Statistics Fiscal Year 2025”).
Below is an overview of market trends and forecasts for the “Aqua” business services offered by our group, including “Returnable Bottles,” “One-Way Bottles,” and “Purified Water Dispenser Systems.”

Returnable bottles are large bottles used in water dispenser services that can be repeatedly collected and reused. The estimated market size for fiscal 2025 is approximately 73.2 billion yen, expected to grow 101% compared to the previous year.
In response to the global trend of reducing plastic use, the value of “returnable bottles,” which can be washed and reused, is being re-evaluated in the home-delivery water market. The demand for reducing plastic waste in households and offices is rapidly increasing, especially among environmentally conscious consumers. The returnable model, which promotes a resource-recycling system, is gaining importance as a service symbolizing corporate ESG management. Moreover, amid rising raw material prices, this model’s reuse of materials attracts attention not only from an environmental perspective but also as a sustainable business foundation with cost stability.

One-way bottles use disposable PET bottles that emphasize convenience. The estimated market size for fiscal 2025 is approximately 110.6 billion yen, expected to grow 101.4% compared to the previous year.
In the home-delivered water market, disposable-type “one-way bottles” are widely used, especially in private homes, due to their overwhelming convenience and reliability in hygiene. The structure in which the container shrinks after each use and minimizes exposure to outside air eliminates the need to wait for empty bottle collection, aligning well with modern consumers’ needs for efficient household chores and strict quality control.
Recently, to maintain convenience while reducing environmental impact, there has been a shift toward “sustainable one-way containers” made from 100% biomass plastics or recycled PET. Such technological innovations, which balance excellent user experience with environmental considerations, strongly support market growth for this model.

Purified water dispensers supply tap water filtered and purified through high-performance filters. The estimated market size for fiscal 2025 is approximately 21.1 billion yen, expected to grow 106.9% compared to the previous year.
As a new paradigm shift in the home-delivered water market, “purified water dispensers” that filter tap water with high-performance filters are rapidly increasing their market share. The “bottleless” convenience, which eliminates the heavy labor of bottle replacement and the need for storage space, enjoys overwhelming support mainly from dual-income households and apartment residents.
Furthermore, the introduction of a “flat-rate” monthly subscription model, regardless of drinking volume, has established it as a subscription service that increases budget predictability. In addition, as an ultimate “local production for local consumption” infrastructure minimizing CO2 emissions and plastic waste associated with logistics, it is rewriting market dynamics as a next-generation standard that achieves economic efficiency and environmental impact reduction.

（Source: Japan Delivery Water & Server Association, “Japan Delivery Water Industry Statistical Data”）

In achieving sustainable growth for the Aqua business, accurate response to the changing market environment and potential risks is critically important. In addition to ensuring safety in “quality and hygiene,” which must be prioritized due to the nature of bottled water products, adapting to “environmental regulations” such as restrictions on plastic usage, as well as managing “logistics maintenance” amid rising logistics costs and labor shortages, are key management challenges.
Furthermore, flexible and swift business transformation in response to “intensified competition,” including from other industries, and shifts in “technology trends” is indispensable for stabilizing profitability and protecting corporate value.

To sustain competitive advantage in the water dispenser market, structural business transformation that balances environmental impact reduction with improved consumer convenience is essential. In addition to deepening resource-circulating models and expanding comprehensive product lineups, optimizing logistics networks through digital technologies is demanded. Furthermore, promoting the introduction of new technologies beyond existing frameworks and developing new markets will be key to overcoming market maturation and establishing a position as next-generation social infrastructure.

As the bottled water market grows more sophisticated and complex, sustainable business relies on personnel with advanced expertise and adaptability to transformation.
Securing and nurturing quality assurance professionals, digital talent accelerating DX, and individuals with strong ethical standards to fulfill social responsibilities will determine next-generation competitiveness.

The recent rapid progress of AI is enhancing the overall sophistication of the business through customer analysis, optimization of maintenance and logistics, and acceleration of product development.

The utilization of AI is becoming an indispensable technological foundation for both competitiveness and enhanced customer experience.

The home-delivered water market continues growing with a focus on environmental considerations and improved convenience.
To maintain and strengthen competitiveness across all areas—“Returnable Bottles,” “One-Way Bottles,” and “Purified Water Dispensers”—our group must provide high-quality water along with operational efficiency improvements and customer experience innovations driven by AI.
Going forward, it is essential to continually adapt flexibly to environmental regulations and changing consumer needs while actively incorporating technological innovations. Focused efforts on business management and the development of advanced and diverse human resources to support these initiatives will be critical to achieving sustainable growth.