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03-Feb-98

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  • DDI, Teleglobe Tie Up on Int'l Phone Service
  • February 3, 1998 (TOKYO) -- DDI Corp., a long-distance new common carrier, formed a business tieup with Teleglobe Inc. of Canada.

    The two will start providing international telephone service by connecting each other's public-private-public switched telephone networks from Oct. 1.

    DDI will connect its domestic network with Teleglobe's international network to provide service.

    While the details of the new service are not yet stipulated, DDI said it will seek to offer the cheapest international telephone service rates. The company appears to be planning to target a broad range of users from individuals to business enterprises, with low rates as a key selling point.

    DDI President Yusai Okuyama and Teleglobe CEO Charles Sirois exchanged a memorandum of understanding at Teleglobe's headquarters in Montreal on Jan. 19.

    Canada-based Teleglobe is an international telecommunications business with a Japanese affiliate, Teleglobe Japan Inc. It plans to acquire its own international circuits and start business as a common carrier on a full scale in Japan by this summer.

    Teleglobe Japan's current clients are mainly telecom businesses and resellers of telephone services, but it also provides a range of menus to large business users as well.

    "This tieup with DDI does not mean that other telecom operators will be outside of the scope of our company's services," said Teleglobe Japan. Teleglobe Japan said there are no discussions now for the tieup to involve capital.

    For DDI to move into the international telecom business, it had to form a tieup with an overseas telecom business as a partner. The major telecommunications operators in Japan are preparing an organizational framework to be able to provide an integrated range of services that encompass both domestic and international communications services.

    International Telecom Japan (ITJ) Inc. plans to merge with Japan Telecom Co., Ltd., while Teleway Corp. is making business preparations with KDD Co., Ltd. in October 1998.

    NTT Corp. plans to move into international operations through its wholly owned subsidiaries, NTT Worldwide Telecommunications Corp. and NTT Worldwide Network Corp.

    In addition, NTT said it received a proposal for a business tieup from International Digital Communications (IDC) Inc. on Jan. 23.

    DDI initially explored the possibility of merging with KDD, but it could not agree on the conditions for such a merger. The company gave up the idea in the fall of 1997.

    At that point, Japan's international telecom companies were eliminated as possible choices for the tieup DDI sought. The alternative of a tieup with an overseas operator came into consideration.

    With the new tieup, the overall framework for the long-distance domestic and overseas telecommunications services industry in Japan will have four core clusters of operators: NTT & IDC, Japan Telecom, Teleway & KDD, and DDI & Teleglobe. The three rival competitors have domestic partners.

    If DDI can provide distinctive features in service and rates, by reducing costs with its international communications lines it might become the driving force in industry's reorganization and restructuring.

    Related stories: NTT, IDC to Form Major Telecom Business Alliance
    MPT to Push Telecom Deregulation Bill in Diet

    (Nikkei Communications)


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    Updated: Mon Feb 2 16:51:02 1998