Aim The purpose of this paper is to examine the status of care service providers by locality and organisational nature. Method Questionnaires were sent to 9505 home‐based care service providers registered in the databases of 17 prefectures. The prefectures were selected according to population size. Results  Numerous for‐profit providers have newly entered the aged care service market and are operating selectively in Tokyo, a typical example of a metropolitan area. Furthermore, both for‐profit and non‐profit providers have suffered from a shortage of care workers and difficult management conditions, which tend to be more pronounced in Tokyo. Conclusion The market under long‐term care insurance was successful in terms of the volume of services, but most providers were sceptical as to whether competition in the market could facilitate quality care services.