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  • NTT Unveils International Telecom Business Plan
  • September 24, 1998 (TOKYO) -- Nippon Telegraph & Telephone Corp. recently revealed its international telecommunication business plan and realignment to be implemented in July 1999.
    "NTT, which is a challenger and newcomer in the global information communications market, will make a concentrated investment of its management resources in the new business, which has high growth potential," Masanobu Suzuki, NTT's executive vice president and general manager of its Global Business Headquarters, said during a press conference.

    Suzuki also revealed that Japan's leading telecom carrier will establish partnerships with reliable foreign counterparts to improve services to the Asia/Pacific and other regions. This suggests that its strategy for international business will differ from that of its domestic business.

    Suzuki did not comment on estimates for operating profit in a few years. He stressed that the firm will promote the international telecommunications business in safe and reliable ways.

    NTT is currently preparing to provide international telecommunications services through its two wholly-owned subsidiaries: NTT Worldwide Telecommunications Corp. (NTT-WT) and NTT Worldwide Network Corp. (NTT-WN).

    NTT-WT, established in July 1997, is an international Type-II telecom carrier that provides services via circuits leased from other companies. The NTT subsidiary has been offering services since September 1997.

    NTT-WN, set up in October 1997, is an international Type-I telecom carrier that possesses its own optical fiber cables and other circuits. The company is preparing to provide services starting from December 1998.

    Currently, the NTT Law provides that NTT's international communications business shall be conducted via its subsidiaries. The provision, however, will be abolished in July 1999 when the company is realigned into one holding company, two regional telecommunications companies and one long-distance telecommunications company.

    At the press conference, Suzuki also unveiled NTT's system to promote the international telecom business after the realignment. First, strategies for the international business of the entire NTT group will be formulated by the holding company. Such business strategies will include large-scale tie-ups, mergers and acquisitions, and funding.

    NTT-WN, the international Type-I telecom carrier, will be merged into the long-distance telecom company after the realignment. NTT-WT, the international Type-II telecom carrier, will survive as a sales function dealing mainly with major users such as multinational firms. The eastern and western regional telecom companies will provide their technological assistance for overseas projects.

    According to Suzuki, the company also plans to diversify its international telecom services, including provision of high-quality Internet Protocol services, under the name of Arcstar and expand its service areas. Although he said the company aims to tie up with both domestic and foreign companies to realize the plans, he did not reveal names of the partners.

    He added that, in an attempt to focus more on business in Asia, NTT will also invest in Asian international telecom carriers to participate in their management as well as tie up with such companies for network connections.

    Currently, major international telecom carriers of the United States and other countries are promoting large-scale mergers and tie-ups to integrate very high-speed IP networks. Commenting on the recent move, Suzuki said even though the company understands providing all services over IP can reduce costs and fees, the question is when to do it. He said the company will be careful in its timing.

    Suzuki said that the company's estimated capital investment and sales growth would be relatively small. "In the international telecommunications business, telecom carriers compete to win as many customers as possible after having increased equipment capacity," he explained. "Therefore possession of excess equipment would be risky. We will play it safe."

    NTT estimates its revenue for fiscal 1998 from the international business at about 10 billion yen (US$75 million). However, the company does not yet have a clear picture of when the business will turn into the black.

    More information in English is at: http://pr.info.ntt.co.jp/news/news98e/980916.html

    (Nikkei Communications)

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    Updated: Wed Sep 23 18:08:20 1998 PDT