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Welcome to the new home page of the Celtnet Telecommunications Companies information site. This page provides you with information on the origins and activities of the company, NTT, Japan's official carrier.
The History of NTT
The image above shows the NTT logo, the official logo of Nippon Telegraph and Telephone. The company was officially formed in 1952 as the Nippon Telegraph and Telephone Public Corporation (NTTPC) [日本電信電話公社] based on recommendations issued by the post-war government's Telegraph and Telephone Restoration Council. In 1953, however, the government created KDD (Kokusai Denshin Denwa Co., Ltd) to facilitate international telecommunications and all international telegraph and telephone businesses were transferred from NTT to KDD during this year. Hence, NTTPC as a solely internal carrier, came into being in 1953. In 1953 NTTPC initiated its first five-year expansion project for telegraph and telephone, which increased the subscriber base from 1.55 million to 2.64 million. Expansion continued and, fuelled by consumer demand, by 1963 the subscriber base had increased to 9.89 million. NTTPC's internal market continued to grow rapidly over the next decade and this led NTTPC to begin expanding into the international market, though the initial years of expansion were marked more by technical cooperation than physical expansion. By 1972 the subscriber base had reached 20 million and NTTPC set themselves the aims of establishing a nationwide telephone service and the task of being able to install services as soon as they were required. These targets were achieved by 1977. This was also the year in which nationwide automatic dialling became available. In 1979 NTTPC established their first permanent international office. However, by the 1980s it was becoming obvious that NTTs monopoly position was making the company bloated and uncompetitive. The second of the government's commissions on privatizations in 1981 recommended privatization as a way of of improving the company's efficiency. A third report (1983) detailed plans for privatization, reorganizing the company's structure and making independent the data communications systems sector (though this was not established until 1988, with the formation of NTT Data Communication Systems Corporation [NTT Data]). The findings of this report were broadly accepted and the corporation law affecting NTT went in to effect on December 20 1984. On April 1st 1985 the Nippon Telegraph and Telephone Corporaton (NTT) [日本電信電話株式会社] was launched as a private stock corporation (with the Japanese government remaining a major share-holder though shares could not be traded internationally and, by law, the government has to hold a minimum stake of 33%). After the 1985 privatization, Japan's internal telephony market was opened to competition and three competitors — Daini-Denden, Nippon Telecom, and Teleway Japan — applied for approval to operate as telecommunications carriers. One effect of direct competition was that NTT was effectively forced to reduce long-distance telephone rates and to improve its overall level of service. NTT was also re-structured and began separating into different and distinct sub-divisions. The first of these was NTT Lease Company Ltd, established in 1985 whose activities included the leasing and installations of terminal equipment. Today NTT includes over 80 distinct subsidiaries. By the late 1980s, however, increased competition was putting a strain on NTTs finances and this led to major re-structuring and a re-focusing of the company on data technologies such as ISDN and broadband as well as the emerging mobile telephone market. A strategy that became a cornerstone of NTTs continued success. Indeed, in 1992 NTT created a new subsidiary: NTT Mobile Communications Network Inc that became NTT DoCoMo to oversee its mobile communications operations. This subsidiary became so successful that, buy 1994, when the market was de-regulated NTT controlled almost half of Japan's cellular telephone market. Yet, throughout this time NTT maintained a monopoly on the 'last mile' of local service. During the late 1990s, however, foreign companies were allowed access into NTTs Asian market and this led to a wave of new competition. Coupled with this, NTT lost its monopoly on local service in December 1996. As a response NTT began diversifying internationally and by 1997 the company had operating licenses in the United Kingdom, France, Germany, Hong Kong, and Singapore. Yet, deregulation of the 'last mile' was not seen as going far enough as, in effect, NTT retained oligopolistic control over land lines in Japan. As a result, in 1998 NTT was divided into a holding company (NTT) and three telecom companies (East, West, and Communications). The new NTT law establishing these companies regulated NTT East and West to serve only short distance communications, and obligated them to maintain telephone service all over the country. However, this was not really a major break-up of the company, and in effect created only internal competition. Indeed, even after this restructuring NTT retained almost a 90% share of Japan's telecommunications market and prices in Japan remained elevated as compared with America or Europe. However, since 1999 the Japanese government has increased pressure on NTT to lower its pricing structure. This has decreased NTTs operating profits at home and the company increased its efforts abroad. NTT in Other TerritoriesNTT has always operated internationally. Indeed, even in 1958 NTTPC had an office in Bangkok and an European office was established in Geneva in 1965, followed by a representative office opened in London in 1973. In 1989, after NTT's privatizaton this office was incorporated as NTT Europe Ltd to help extend global networks of Japanese business users. Representative offices were also opened in Brazil (for the South American market), Jakarta, Indonesia, in 1972; in Kuala Lumpur, the Malaysian capital, in 1986; and in Singapore in 1990. NTTPC also opened an office in Beijing in 1985 (following the normalizaton of relations between China and Japan in 1972). Throughout this period, NTTPC had a presence in America, with a presence in New York established in 1966 which developed into a branch office in 1970. Later a branch office was established in California and after prvatization the East and West coast branch offices were incorporated into NTT America Inc. In May 1986 NTT purchased Northern Telecom. In 1985 NTT established a subsidiary, NTT International Corporation (NTTI) with the aim of providing consultancy services and products to overseas buyers. This subsidiary also allowed NTT to establish telecommunications infrastructures in other territories, especially those with poor infrastructures of their own. In 1987 NTT entered the Australian market by helping to develop a facsimile service. In 2000, due to financial pressures at home (detailed above) NTT entered foreign markets with a vengeance. In 2000 itself they made a $5.1 billion offer (and purchased) Verio Inc, an US-based ISP (internet solutions provider). During the same period NTTs cellular division, NTT DoCoMo invested nearly $16 billion in global cellular companies including: AT&T Wireless in the USA and KPN Mobile in Europe. However, the overall plan backfired and NTT DoCoMo made a $13 billion loss on its investments. Overall, however NTT remains strong and the major divisions still include: Regional Divisions: |
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