NTT Opens Fiber-Optic Network to Rivals as Competition Looms Ahead

Japan's Nippon Telegraph and Telephone Corp. (NTT) has accepted a government proposal to open its fiber-optic network up to rivals that want to offer high-speed Internet services. Meanwhile, a trio of Japanese telecommunications providers has formed an alliance to directly compete with the country's market leader.

Oct 4th, 2000

By Michael Sciannamea, Web Editor

Japan's Nippon Telegraph and Telephone Corp. (NTT) has accepted a government proposal to open its fiber-optic network up to rivals that want to offer high-speed Internet services. Meanwhile, a trio of Japanese telecommunications providers has formed an alliance to directly compete with the country's market leader.

According to NTT, this action will allow users to download digital video and audio material with minimal loss of quality. However, NTT has made demands of its own to ensure that it won't lose out in the broadband business.

NTT's President Junichiro Miyazu said guidelines should be set for an appropriate competitive environment so that the carrier's status as a former state monopoly wouldn't put it at a disadvantage.

NTT argues that while it may have been a monopoly in the past, it should not be punished for that in the current competitive environment.

"Fiber-optic networks will develop in a more competitive environment and are fundamentally different from metal (conventional) networks, which were built under a monopoly," NTT said in an outline of a report delivered at the first hearing of a government council reviewing Japan's telecommunications policies.

At the same time, NTT unveiled plans to develop a far-reaching fiber optic network service of its own to connect urban homes within the Tokyo metropolitan area beginning in December with speeds of up to 10 megabits a second.

As a result of NTT's actions, three Japanese telecommunications companies have completed a planned merger and will begin competing immediately with NTT.

The new entity, KDDI, is comprised of KDD Corp., Japan's largest overseas carrier, and two newer companies serving the country's long-distance and mobile-phone markets--DDI Corp. and IDO Corp.

Announced last December, the merger is one of several high-profile deals that have been encouraged by recent measures to deregulate Japan's long-protected telecommunications industry, second in size only to that of the United States.

KDDI said in a statement it is committed to "competing head-to-head with the world's mega-carriers"--NTT. Formerly Japan's sole domestic carrier, NTT still connects 95 per cent all local calls and has owned the largest share of the country's market for mobile services through subsidiary NTT DoCoMo Inc.

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