Japan goes all-in to fortify subsea cable infrastructure

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(Source: Batchelder/Alamy Stock Photo)

Japan's Ministry of Internal Affairs and Communications (MIC) has approved subsidies for four companies currently involved in setting up cable landing stations and installing branches of international submarine cable projects.

SoftBank Corp., IPS Corporation, IPS Pro Co. and Shikoku Electric Power were selected following an evaluation process tied to a competitive application period running from June 5 to July 6, 2026.

These latest government subsidies come from the FY2025 Supplementary Budget for the "Digital Infrastructure Strengthening Project through Regional Distribution of Submarine Cables," a multi-billion-yen initiative led by the MIC to strengthen the resilience of Japan's digital infrastructure by decentralizing critical assets away from heavily concentrated landing zones like Chiba and Mie.

Although the specific amounts allocated to SoftBank, IPS, IPS Pro and Shikoku Electric Power are not publicly disclosed, the supplementary budget for the project in FY2025 has been earmarked at 40 billion Japanese yen (US$252.55 million). This builds on past allocations, including JPY50 billion ($315.68 million) in FY2021 and JPY30 billion ($189.41 million) in FY2023.

The subsidies are distributed through Japan's Digital Infrastructure Development Fund, which is being managed by the Communications and Information Network Association of Japan (CIAJ). Rather than channeling investment solely through state-owned networks, Japan has structured the fund to provide substantial subsidies to private telecom companies, encouraging them to set up critical facilities in regional hubs.

Japan's Digital Infrastructure Development Fund has steadily grown through multi-year allocations by the MIC to target various aspects of the country's digital infrastructure, including data centers and submarine cables. To date, the total budget specifically allocated to the fund across successive supplementary budgets amounts to JPY132.5 billion ($1.97 billion).

Route diversification

Historically, over 80% of Japan's data centers and nearly all major international cable landing stations have been heavily concentrated in two areas: Chiba Prefecture (serving Tokyo/East Japan) and Mie Prefecture (serving Osaka/West Japan).

"Submarine cable operators typically seek the shortest possible route to minimize latency. Practical considerations such as avoiding undersea volcanoes or fault lines and selecting suitable landing sites result in limited cable routes and concentrations of landing points in narrow areas," wrote Dr. Motohiro Tsuchiya, professor at the Keio University Graduate School of Media and Governance, and adjunct fellow at the Japan Institute of International Affairs (JIIA) in a recent article on the institute's website.

Tsuchiya was one of nine experts on the MIC's study group on the protection of international submarine cables.

"Cables connecting the US West Coast to Japan often land on the eastern side of the Bōsō Peninsula in Chiba Prefecture or in Ibaraki Prefecture. As concentration increases vulnerability, Japan must diversify both cable routes and landing points to reduce risks from terrorism, missile strikes, or other forms of attack," he added.

The MIC's Digital Infrastructure Strengthening Project, which involves the regional distribution of submarine cables, aims to systematically dismantle this severe geographical concentration of Japan's data infrastructure. By spreading its infrastructure across different locations, Japan can ensure that it remains digitally connected even if its traditional hubs are disrupted by natural disasters, cybersecurity threats or geopolitical conflicts.

The latest government subsidy allocations will establish three new carrier-grade subsea landing corridors across northern, central and western Japan. SoftBank is set to construct a cable landing station (CLS) in Tomakomai City, Hokkaido, to support the company's AI data center campus in Tomakomai. This will harness Hokkaido's renewable energy sources and favorable ambient climate.

IPS Corporation. will deploy an offshore marine branch line and branching unit off the coast of Wakayama City in Wakayama Prefecture. This will connect the international Candle Subsea Cable System to the southern Kansai coastline. Meanwhile, IPS Pro Co. will build a carrier-neutral, open-access CLS in Wakayama City, Wakayama Prefecture, offering an alternative route to Osaka by bypassing Mie/Shima.

Shikoku Electric Power is set to develop a CLS, an offshore branch line and a branching unit infrastructure in Anan City and in Tokushima Prefecture offshore. This will form the "Shikoku Digital Gateway," marking the first time that international optical fiber pairs will land on the island of Shikoku. The project is directly backed by Shikoku Electric's baseload grid.

Subsidy for subsea cable vessels

The Japanese government is funding domestic efforts to shore up submarine cable infrastructure through two parallel initiatives, which are aligned to the recently approved draft framework to strengthen international submarine cable infrastructure.

In addition to the route diversification initiative managed by the CIAJ, the MIC requested JPY100 billion ($631 million) in the budget for the 2027 fiscal year to subsidize the purchase and upgrading of domestic submarine cable-laying and repair ships.

Japan has only five cable-laying ships of 5,000 tons or more – three owned by an NTT Group company, two by a KDDI Group subsidiary. With a typical lifespan of around 40 years, some of these vessels are already over 30 years old and starting to deteriorate.

NEC Corp., which commands approximately 20% of the global undersea cable manufacturing market, lacks its own fleet of cable-laying ships and has instead depended on leasing vessels from overseas companies.

The proposed JPY100 billion subsidy could reduce the financial barrier for local companies looking to purchase these specialized ships, with the government offering to cover up to 50% of the procurement costs.

Industry experts estimate that the price of new, state-of-the-art cable-laying ships is between JPY40 billion and JPY50 billion. The government is aiming to support the acquisition of three to five of these vessels through the proposed subsidy.

Revised government policies

The Japanese government started paying attention to the security of submarine cables within its jurisdiction following suspicious cable breaks off the waters of Taiwan and the Baltic Sea in 2024. These concerns have escalated amid the growing tensions between China and its neighbors over territorial disputes in the South China Sea.

In June of this year, the Japanese parliament passed significant amendments to the Economic Security Promotion Act, marking a fundamental shift in how the country approaches the protection of its undersea communication networks.

Before these reforms, the 2022 version of the Act only vaguely classified submarine cables as "important private-sector technologies", providing them with minimal policy support. The revised Act explicitly elevates international submarine cables, as well as satellites and rockets, to the status of "specified critical materials" and core critical infrastructure.

Japan's push comes amid growing anxiety across East Asia about undersea cable vulnerabilities, which pose risks to the region's AI and digital infrastructure ambitions.

The newly revised law also specifically expands the remit of the government-affiliated Japan Bank for International Cooperation (JBIC). The JBIC is now authorized to issue high-risk subordinated debt and make direct investments in "designated overseas business projects".

In the event of a financial or geopolitical crisis affecting a critical overseas or regional cable project, the revised law enables JBIC to absorb the losses, thereby protecting private Japanese telecom companies from bankruptcy and encouraging them to expand their networks more aggressively.

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