(#゜Д゜)/英字新聞
NTT must strengthen global competitiveness
What should be done to make the country's telecommunications industry its growth engine? A special task force set up in the Internal Affairs and Telecommunications Ministry has begun debating the issue.
The team of specialists and representatives of communications and broadcasting industries will map out the government's new information technology strategy over the next 12 months. The focus of their discussion is a review of NTT Corp.'s management structure.
The move is significant in that NTT's management structure is being reexamined 10 years after the telecommunications giant was reorganized in 1999. In exploring the aforementioned question, it is essential for the task force to address pertinent issues from the standpoint of how to strengthen the international competitiveness of the nation's telecommunications industry as a whole, with NTT at its core.
NTT has always come under fire for its monopoly of the country's communications network since it was privatized in 1985. This has led to repeated discussions over whether NTT should be split up.
In 1999, NTT was reorganized into two regional carriers--NTT East and NTT West--and a long-distance and international carrier, but its integrated management was kept intact under a newly created holding company. NTT's rival companies are calling for a fresh review of NTT's management structure with an eye to its complete breakup, namely, capital separation among the group firms.
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Cell phones, Net ascendant
However, fixed-line telephones are gradually taking a backseat to cell phones and the Internet as key players in the telecommunications market nowadays. The NTT group's market share in the high-speed and large-capacity communications, as well as its share in the cell phone services market, stands at around 50 percent. This is in stark contrast to NTT's erstwhile dominance in the regional telephone network.
Rehashing arguments advanced in the past, when the fixed-line telephone network was the mainstay of communications services, would not be constructive. What is more important is establishing a system that can compete satisfactorily in the global communications market.
European cell phone makers are exporting their products in bulk to developing countries, where they have established cell phone companies. In China, government-affiliated financial institutions are cooperating with cell phone carriers to expand the range of their services overseas.
In contrast, NTT lags behind its foreign counterparts in overseas operations, exacerbated by Japan's communications technologies being an odd man out in the international market. Japanese cell phone makers were handicapped from the beginning in overseas markets because they could not export communications equipment and cell phone handsets that use incompatible formats.
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Firm needs new mind-set
In information services, Amazon.com Inc. and Google Inc. of the United States are steadily increasing their customers in Japan by making full use of NTT's high-speed and large-capacity communications network. If circumstances go unchecked, Japan's telecommunications industry could be overwhelmed in both hardware and information services by its European and U.S. rivals if nothing is done.
To turn the tables, it is important to have NTT shed its old style and transform it into a global company. NTT itself must correct its inward-looking management mind-set.
NTT should further open its communications network and technologies and build a robust structure that can survive international competition. Business tie-ups and integration with companies outside its group will probably be among its options.
NTT alone cannot internationalize the telecommunications industry. We hope the task force will aim at crafting an IT strategy in which the public and private sectors work in tandem.
What should be done to make the country's telecommunications industry its growth engine? A special task force set up in the Internal Affairs and Telecommunications Ministry has begun debating the issue.
The team of specialists and representatives of communications and broadcasting industries will map out the government's new information technology strategy over the next 12 months. The focus of their discussion is a review of NTT Corp.'s management structure.
The move is significant in that NTT's management structure is being reexamined 10 years after the telecommunications giant was reorganized in 1999. In exploring the aforementioned question, it is essential for the task force to address pertinent issues from the standpoint of how to strengthen the international competitiveness of the nation's telecommunications industry as a whole, with NTT at its core.
NTT has always come under fire for its monopoly of the country's communications network since it was privatized in 1985. This has led to repeated discussions over whether NTT should be split up.
In 1999, NTT was reorganized into two regional carriers--NTT East and NTT West--and a long-distance and international carrier, but its integrated management was kept intact under a newly created holding company. NTT's rival companies are calling for a fresh review of NTT's management structure with an eye to its complete breakup, namely, capital separation among the group firms.
===
Cell phones, Net ascendant
However, fixed-line telephones are gradually taking a backseat to cell phones and the Internet as key players in the telecommunications market nowadays. The NTT group's market share in the high-speed and large-capacity communications, as well as its share in the cell phone services market, stands at around 50 percent. This is in stark contrast to NTT's erstwhile dominance in the regional telephone network.
Rehashing arguments advanced in the past, when the fixed-line telephone network was the mainstay of communications services, would not be constructive. What is more important is establishing a system that can compete satisfactorily in the global communications market.
European cell phone makers are exporting their products in bulk to developing countries, where they have established cell phone companies. In China, government-affiliated financial institutions are cooperating with cell phone carriers to expand the range of their services overseas.
In contrast, NTT lags behind its foreign counterparts in overseas operations, exacerbated by Japan's communications technologies being an odd man out in the international market. Japanese cell phone makers were handicapped from the beginning in overseas markets because they could not export communications equipment and cell phone handsets that use incompatible formats.
===
Firm needs new mind-set
In information services, Amazon.com Inc. and Google Inc. of the United States are steadily increasing their customers in Japan by making full use of NTT's high-speed and large-capacity communications network. If circumstances go unchecked, Japan's telecommunications industry could be overwhelmed in both hardware and information services by its European and U.S. rivals if nothing is done.
To turn the tables, it is important to have NTT shed its old style and transform it into a global company. NTT itself must correct its inward-looking management mind-set.
NTT should further open its communications network and technologies and build a robust structure that can survive international competition. Business tie-ups and integration with companies outside its group will probably be among its options.
NTT alone cannot internationalize the telecommunications industry. We hope the task force will aim at crafting an IT strategy in which the public and private sectors work in tandem.
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