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News from NET and COM '99

  • [NET & COM ’99] NTT Aims to be Fourth-Generation Carrier, VP Says
  • February 8, 1999 (TOKYO) — NTT will offer low-cost broadband services by combining a diverse range of conventional and new technologies in a next-generation network infrastructure.
    Toshiharu Aoki, senior executive vice president of Nippon Telegraph and Telephone Corp. (NTT), made the announcement during his address at NET & COM ’99.

    The show was held Feb. 2-5 at Makuhari Messe in Chiba prefecture, near Tokyo.

    The key points of his speech were as follows:

    Consolidated sales for the NTT group amount to about 10 trillion yen (US$88 billion), but analog phone services account for less than half that total. Digital communication services are now the major portion of NTT’s revenue.

    In the data communications area, there has been rapid growth in mobile communications, the Internet and system integration services (intranets and extranets). Mobile communications have reached about 3 trillion yen annually, while Internet and system integration services each account for nearly 1 trillion yen at present, with all three categories still climbing.

    A telling statistic is the “10 million” user mark. It was three years ago, in 1996, that mobile phone users in Japan exceeded 10 million people. Mobile phones were mostly used by companies for business purposes in the past, but they have gained a broad base of popularity among individual consumers, accelerating the trend toward general affordability. Internet users in Japan soared over 10 million in 1998, marking the transformation of the Internet from a workplace tool to a medium accessible to everyone.

    In the system integration area, NTT has seen a rapid rise in ISDN services. Subscriber numbers are currently just under 4 million, but growing at a rate approaching a million and a half new subscribers every year. With subscribers likely to reach 10 million in four or five years, ISDN shows every sign of becoming a huge general infrastructure.

    In October 1996, when there was much discussion about NTT’s mooted reorganization, the company published its R&D; vision of the coming of age of multimedia technologies in a paper entitled “NTT’s R&D; — Innovation Toward the 21st Century.” In October 1998, NTT enlarged upon its corporate vision in another paper, “Global Information Sharing Business in the 21st Century”.

    NTT identifies three developing waves in information sharing. The first is the advent of digital broadcasting and networked television services, due around the year 2000. The second wave will be the delivery of mass media contents via networks (around 2002), and the third wave will be information output from small office/home office (SOHO) and residential users.

    The first wave will have a significant impact. Terrestrial television broadcasting is expected to be digitized in 2003, but a number of new developments may happen before that time. We can expect a range of information appliances to enter the market in the next few years, Aoki said.

    During the second wave, optical fiber will be laid in most of Japan’s cities and towns. Mass media services will reach consumers via optical fiber cable and by means of high-speed bandwidth implemented on standard copper wiring. Inexpensive broadband communication services are essential for achieving this goal, Aoki said. To this end, NTT’s R&D; objectives are to develop an information delivery infrastructure that is easily accessible, reliable and fast.

    According to Aoki, information sharing can be categorized into four distinct markets: contents, delivery platforms, networks and terminals. NTT aims to concentrate its development efforts in the area of platforms and networks, collaborating with companies and experts at home and abroad.

    In regard to network operations, during 2000 — that is, by the end of next year — NTT will finish replacing copper wiring with optical fiber cable in all business districts that have populations of about 100,000 people. Once installation is completed, existing copper wire 64kbps transmission rates will graduate into broadband data services provided at a price comparable to conventional phone services. This transformation is just around the corner.

    In the second wave of information sharing, NTT anticipates that downstream services of 6Mbps and 10Mbps can be provided. Aoki did not reveal when such services might begin or how much they might cost the consumer, but he indicated that prices would be set at acceptable levels.

    In the third wave, both downstream and upstream services will be available, he said.

    NTT has finalized its future direction regarding next-generation networks for the coming third wave. According to Aoki, NTT aims to become a “fourth-generation information carrier” that will be unlike any carrier to date.

    The first generation of telecom carriers were the leading telephone companies in each country, working in phone services. This phase gave birth to second-generation industry groups, such as MCI WorldCom Inc., which provide end-to-end transmission services to corporate users and organizations.

    More recently, a third generation of carriers has entered the scene, providing Internet Protocol (IP) services via optical fiber and wavelength division multiplexing (WDM) technology. In the United States, Qwest Communications International Inc. and Level 3 Communications Inc. are two examples. In Japan, Crosswave Communications Inc. typifies the trend.

    NTT’s aim in becoming a fourth-generation information carrier is to support and respond to these developments in a flexible manner.

    NTT has been criticized as having an old-style, entrenched outlook because it has not followed other companies’ initiatives in building low-cost WDM-based networks and IP networks.

    However, Aoki believes that in the new age of information sharing, when technology and consumer requirements change radically in just a few years, the “out-of-date” carriers will be those that base their entire network infrastructure on one type of system. It is simply impossible for a carrier to continue with the same type of network technology for ten years, he said.

    Expecting change as a given of the industry, NTT will provide customers with the services they need by using a combination of existing networks and new infrastructure. This is the best choice, considering the rapid pace of technological advances and changing customer requirements, Aoki said.

    In 1999, NTT will lay the groundwork for next-generation Internet services. The company will use technology that transmits IP packets on asynchronous transfer mode (ATM) links, and intends to adopt the next-generation Internet Protocol version 6 (IPv6) as standard across its network infrastructure.

    These developments will be integrated into an inexpensive high-speed consumer service based on WDM, to be called the “Metro-Line Ultra-High Speed Network”. The launch date is undecided, but NTT will choose an appropriate time, Aoki said.

    Related story: NTT to Build 64Mbps, One-Way Network By 2002

    (Nikkei Communications)

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