NTT Communications was created with the privatization of NTT, which is formerly was Japan’s domestic monopoly telecommunications operator (KDD was had the monopoly for overseas telecommunications from Japan).
NTT Communications started globalization with the acquisition of US internet access, hosting and service provider VERIO for a approximately US$ 5.5 billion, announced on May 8, 2000.
Similarly, Japan was far in advance of other countries in laying the foundations for the mobile internet, with the introduction of the DoPa (DoCoMo Packet) packet switched network on March 28, 1997, several years before packet switched networks were introduced in EU and elsewhere. However, Japan’s electronics and telecoms industries largely failed to capture global value from this pioneering work. Essentially only Softbank with the SPRINT acquisition now has hope to capture such global value.
A very interesting point is that in EU there are many discussions and uncertainties how broadband fiber investments can be profitable. Japan has solved this problem: FTTH business in Japan is profitable. We see arbitraging opportunities in capturing value from Japan’s know-how, similar to Softbank’s “time shift” investments, arbitraging the time shift of internet roll-out in US vs Japan vs China, as explained in our Softbank-report.
Japan has 30% more FTTH fiber broadband subscriptions than EU + Switzerland + Norway + Iceland…
Several years ago the EU engaged our company Eurotechnology Japan KK to benchmark EU vs Japan in fixed and wireless broadband. Our summary was that broadband connections are the lifeblood of our information society, and that Japan was far ahead of EU in providing and using both fixed and wireless broadband, and broad band fiber connections were much faster and cheaper in Japan than in EU. Although both have progressed since our benchmarking work for the EU, Japan is still very far ahead of EU in terms of fast fiber broadband penetration.
However, provision of broadband fiber connections is only one side of the coin. The other side of the coin is capturing value and creating wealth for the society. The really important point is, whether Japan’s electronics, telecoms, content and service industries can capture global value from the advanced deployment of broadband infrastructure. As we discussed in detail in the “Post-Galapagos working group”, Japan is being held back by the “Galapagos effect” – and the trick will be to make the necessary changes to break out from this trap.
Read detailed analysis in our Japan-Telecommunications-Industry Report
The day before the Finland-Japan Ubiquitous Society Conference in Tokyo, I briefed the top-management (CEO, CTO and other top managers) of TeliaSonera, on October 26, 2006.
The next day, October 27, 2006, the Finland-Japan Ubiquitous Society Conference was held. Tero Ojanpera, Exec VP and CTO of NOKIA, gave an overview of NOKIA’s vision of communications, other speakers and panelists included Juho Lipsanen, Finland CEO of TeliaSonera, KDDI Chairman Murakami.
Panel discussion with TeliaSonera CEO Juho Lipsanen and KDDI-Chairman Murakami.
Presentation to EU Technology Attaches at the Embassy of the European Union in Tokyo
Today (March 23, 2006) I was invited to brief the Technology Attaches of the Embassies of the 25 European Union countries here in Tokyo about Japan’s telecommunications sector (both fixed net and wireless) in a one hour presentation + discussion. I had offered several alternative topics and the conference of EU Technology Attaches selected the most provocative title I had offered:
Vodafone KK’s Chairman and former NTT-DoCoMo Vice-President Tsuda, who had worked 34 years at NTT and DoCoMo (and who resigned from his Vodafone-Japan CEO position a few weeks after being head-hunted), said in a recent interview with Bloomberg that “Japan is way ahead in 3G”. – therefore, although this title is clearly provocative, it’s clearly worthwhile examining this question. With the sale of Vodafone KK to SoftBank last week, the timing of this briefing was particularly interesting. My presentation discussed the following questions:
Is Japan ahead of Europe in Telecommunications?
What is the impact?
Is this important?
What Europe can do to catch up
EU awards project contract to Eurotechnology Japan KK to document the status of fixed and wireless broad band communications in EU vs Japan
As a consequence of this presentation the EU awards project contract to Eurotechnology Japan KK to document the status of fixed and wireless broad band communications in EU vs Japan, and to prepare recommendations for the EU to learn from Japan, and accelerate progress in Europe.
Japan telecommunications industry market report
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Today’s top article in Nikkei is about Cable and Wireless-Japan: the article reports that Cable and Wireless is in discussion with Softbank and a private equity firm to sell their Japan operations. Apparently this news article is not confirmed, and it already mentions a purchase prize on the order of US$ 100 million. This article appeared in the top position in Nikkei – but there are several things a bit mysterious about it.
I did not follow Cable and Wireless recently in Japan, but it seems that C&W made a loss of YEN 61.6 OKU on sales of YEN 713 OKU, i.e. almost 10% loss.
Spent all morning discussing with one of the innovation managers of a big European telco. Interesting. Spent afternoon with a US bio-tech company which which is thinking of asking us to build their business in Japan, and in the evening listened to a talk by Tadashi Onodera, the CEO of KDDI. Expected him to talk mainly about mobile – but he did not. His focus was a national VOIP network they are building, attacking the fixed line income of NTT. Got hold of him after his talk and discussed with him for about 10 minutes.
UPDATE: on October 26, 2004, Softbank announced the acquisition of Cable & Wireless IDC. Total cost of the acquistion is announced as YEN 12.3 billion (= US$ 110 million)