(Nikkei BP Group)
(No.1 High-Tech News Site in Japanese)
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| NTT Unveils International Telecom Business Plan
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September 24, 1998 (TOKYO) -- Nippon Telegraph & Telephone Corp. recently
revealed its international telecommunication business plan and realignment
to be implemented in July 1999.
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"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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