Diversifying Japan's Digital Gates: IPS Announces a new Cable Landing Station in Wakayama

On July 2, 2026, Tokyo Stock Exchange-listed telecommunications provider IPS, Inc. (TSE: 4390) announced that its Board of Directors has resolved to advance full-scale evaluation and development planning for a new international Cable Landing Station (CLS) in Wakayama Prefecture, near Osaka, and the development of an associated Candle branch connection.

The overall project has an estimated investment scale of approximately 23 billion yen (~$143.75 million USD). This ambitious infrastructure play will secure a dedicated branch connection for the upcoming, Meta-backed "Candle" submarine cable system, bringing a major regional data artery directly to the Kansai region. When combined with IPS's prior commitments, this project marks the expansion of a massive, multi-year subsea program.

With the introduction of this new branch, the Candle submarine cable system will achieve a highly resilient dual-landing architecture in Japan. The connection will tie the upcoming Wakayama CLS directly into the main Candle trunk, providing a robust alternative route alongside the system's landing at SoftBank's Maruyama CLS.

1. The JPY 44 Billion Subsea Program: A Dual-Phase Investment Strategy

A detailed financial analysis of IPS's disclosures reveals that the Wakayama project is the second phase of a highly strategic, two-part investment portfolio totaling 44 billion yen (~$275 million USD) (calculated using the project's assumed exchange rate of 1 U.S. dollar = 160 yen):

• Phase 1: The Candle Base Section (July 2025): IPS initially committed 21 billion yen (~$131.25 million USD) to fund its core participation, initial capacity allocation, and trunk line development for the Candle subsea system.
• Phase 2: The Wakayama Branch & CLS (July 2026): IPS allocated an additional 23 billion yen (~$143.75 million USD) to fund the construction of the physical Cable Landing Station in Wakayama and the marine laying of the dedicated Candle Wakayama branch line. While the branch line itself is expected to be wholly owned by the company, IPS is evaluating optimal joint-venture structures and public subsidies to minimize its direct capital burden for the land-side station.

2. Promoting Open-Access Competition: Challenging Domestic Carrier Dominance

The physical landing station will be managed under a highly structured, open-access business model designed to bring healthy competition to Japan's historically closed telecommunications landscape:

• The Joint Venture Model: The Wakayama CLS will be co-managed under a joint venture consisting of a 51% majority stake held by IPS's domestic telecommunications subsidiary, IPS Pro, Inc., and a 49% stake held by selected domestic partners (including domestic carriers and data center operators) with whom discussions are currently underway.
• Transitioning Away from Closed-Access Landing Stations: Japan's cable landing station operations have historically been dominated by established major telecommunications carriers, such as NTT East/West, the KDDI Group, SoftBank, and Arteria Networks. Historically, these operators have favored closed-access landing paradigms.
• The Open-Access Alternative: The Wakayama CLS will operate under a strict "open-access" policy. This carrier-neutral platform will allow other telecommunications carriers, backhaul providers, and hyperscalers to colocate, peer, and interconnect on a neutral footing. This model prevents vendor lock-in, significantly optimizes transit and line costs, and provides an efficient alternative for routing data into the Kansai region's expanding digital ecosystem.

3. Breaking the Chiba-Mie Concentration: Strategic National Resilience

Historically, Japan’s international subsea cable infrastructure has faced extreme geographical concentration. The vast majority of the nation's subsea fiber landing points are clustered on just two peninsulas: the Boso Peninsula in Chiba Prefecture (east of Tokyo) and the Shima Peninsula in Mie Prefecture (central Japan).

This heavy concentration has been flagged as a major vulnerability by Japan’s Ministry of Internal Affairs and Communications (MIC). In response, the Ministry formulated the "Digital Infrastructure Development Plan 2030" in June 2025, which calls for the geographical dispersal of data centers and submarine cables to ensure national resilience and disaster recovery capabilities. In June 2026, the MIC formally approved a draft framework to significantly strengthen the protection and resilience of the nation's international submarine cable infrastructure. 

• Disaster Redundancy: While eastern Japan's landing infrastructure has successfully diversified across Chiba and Ibaraki Prefectures, the Kansai region remains concentrated in Mie Prefecture. Landing the Candle system in Wakayama introduces vital routing diversity to western Japan. It ensures that even in the event of a severe earthquake or natural disaster in the Kanto (Tokyo) region or Mie, Japan's international internet connectivity remains intact.
• Geographical Proximity to Osaka: Wakayama is geographically well-positioned to connect directly to the major and rapidly expanding data center clusters in the Osaka metropolitan area, providing advantages in both terrestrial backhaul deployment costs and network latency.
• Economic Security Alignment: The project aligns closely with Japan's national policies on digital infrastructure dispersal, paving the way for potential public subsidies and strategic support.

4. Technical Profile of the "Candle" Connection

The Wakayama CLS is engineered to serve as the landing interface for a dedicated branch of the Candle subsea cable system, an 8,000-kilometer optical highway connecting Japan, Taiwan, the Philippines, Indonesia, Malaysia, and Singapore.

• High-Density 24-Fiber-Pair Design: While most legacy intra-Asia cable systems carry 16 or fewer fiber pairs, Candle utilizes an advanced 24-fiber-pair (24FP) architecture containing a total of 48 individual optical fibers.
• Staggering 570 Tbps System Capacity: Supplying the system is Japanese equipment giant NEC Corporation, utilizing next-generation Space Division Multiplexing (SDM) marine repeaters to deliver a total design capacity of 570 Terabits per second. This massive throughput is specifically optimized to handle data-heavy AI training and 5G workloads.
• Dual-Landing Topology in Japan: To maximize reliability, the Candle system features a dual-landing design in Japan. While the main trunk lands at SoftBank's existing Maruyama Landing Station in Minamiboso City, Chiba Prefecture (feeding Tokyo), the Wakayama branch will feed the Kansai region, establishing highly redundant routing options.

5. InfiniVAN: Driving the Philippine Cross-Border Digital Gateway

IPS’s investment in Wakayama is highly complementary to its existing digital infrastructure footprint in Southeast Asia, led by its Philippine telecommunications subsidiary, InfiniVAN Inc.. Through InfiniVAN, the group is aggressively expanding its landing station capabilities to establish the Philippines as a primary communications hub in the Asia-Pacific region:

The Baler CLS Construction & Expansion

InfiniVAN is the designated landing party for Candle on the eastern seaboard of Luzon Island, operating out of Baler, Aurora Province. The company broke ground on the Baler Cable Landing Station (CLS) on August 6, 2025.

• $31 Million Investment: While initially budgeted as a $16 million project, InfiniVAN expanded the capital allocation in March 2026 by an additional $15 million, bringing the total investment to $31 million.
• Five-System Capacity: This capital injection was utilized to expand the Baler CLS to support up to five international submarine fiber-optic systems. Candle will act as the anchor system for the facility when it becomes operational in early 2028.

BCDA / DICT Poro Point CLS Lease 

In March 2026, InfiniVAN signed a landmark, long-term lease agreement with the Bases Conversion and Development Authority (BCDA)—which is operated and overseen by the Department of Information and Communications Technology (DICT)—to develop and operate the Poro Point Cable Landing Station in San Fernando, La Union, as an Open CLS.

The lease also grants InfiniVAN access to the 240-kilometer terrestrial fiber-optic corridor of the Luzon Bypass Infrastructure (LBI). This partnership positions InfiniVAN as the critical landing partner for the reconfigured Pacific Light Cable Network (PLCN):

• The PLCN Strategic Reconfiguration: To mitigate severe maritime risks associated with the disaster-prone and congested Luzon Strait, the PLCN system is being divided across the LBI corridor.
• Dual-Coast Routing: The longer portion of the PLCN cable originating from the United States is being re-routed and extended to land at InfiniVAN's upcoming Baler CLS on the east coast of Luzon. Meanwhile, the portion connecting to Hong Kong will link to the existing Poro Point CLS in San Fernando, La Union, on the west coast.
• Terrestrial Cross-Island Bridge: By linking these two coastal landing facilities via the 240-kilometer LBI terrestrial fiber corridor, InfiniVAN can bypass the Luzon Strait altogether, distributing subsea capacity efficiently to optical hubs across the country while establishing an open-access gateway.

6. Financial De-risking via "Demand-Driven" Development

To safeguard its capital and ensure long-term profitability, IPS is employing a strict "demand-driven" development model to secure investment recovery before significant capital is deployed:

• Pre-Sales and Capacity Contracts: The initial JPY 21 billion Candle base investment was heavily de-risked by securing early capacity sales and advance payments, anchored by an initial IRU (Indefeasible Right of Use) contract signed on July 30, 2025. Subsequent international capacity sales to telecom carriers and hyperscalers have progressed steadily.
• Corporate Credit Lines: To fund the early construction stages of the Candle trunk line, IPS secured robust credit facilities from prominent financial institutions, including Mizuho Bank and the Japan Bank for International Cooperation (JBIC).
• Replicating the Model in Wakayama: IPS is applying this identical de-risking playbook to the JPY 23 billion Wakayama expansion. Commercial discussions for the Wakayama Branch line and CLS services are already progressing steadily with prospective carriers and hyperscale tenants, ensuring highly visible revenue pipelines before the final investment decision.

A Final Investment Decision (FID) is expected to be formalized by the second quarter of the current fiscal year (FY2026), subject to ongoing technical, environmental, and seismic evaluations.

7. Summary Profile: Wakayama CLS & Candle Cable System