INTERVIEW-Japan telecom competition growing slowly
By Chris Johnson
BANGKOK, Nov 6 (Reuters) - Japan's international telecoms market is
gradually opening to competition but much of its local market will stay closed
for many years, an official at Japan's Ministry of Posts and Telecommunications
(MPT) said on Friday.
Shun Sakurai, the director of telecommunications policy at the MPT's telecoms
bureau, told Reuters the Japanese government had made significant progress
towards deregulating telecoms markets over the last decade. British Telecom
<BT.L> and MCI WorldCom <WCOM.O> of the United States have both
recently been awarded licences to operate international services from Japan and
are installing fibre optic networks.
WorldCom is also preparing a Japanese long-distance service, which is
expected to be launched soon.
"I think that especially in the international telecoms market there will be very
strong competition in one or two years in the future," Sakurai said in an
interview at a Thai telecoms industry seminar.
"The international and long distance market is now deregulated...I cannot say
when local markets will be competitive markets. But we are trying," he added.
Until the mid-1980s Japan's telephone market was split between two
monopolies, Nippon Telegraph and Telephone Corp <9432.T> (NTT), which
controlled the domestic network, and Kokusai Denshin Denwa <9431.T>
(KDD), which ran the smaller international calls market.
But a series of steps since 1985 have broken up large parts of these
monopolies and, in accordance with World Trade Organisation rules, limits on
foreign ownership of most telecoms companies were removed earlier this year.
Sakurai said KDD's share of the international telecoms market had fallen to
about 65 percent and would fall further.
"Foreign companies are very aggressive in this field and the international
companies are also doing a lot of marketing. In the quite near future KDD's
share will be near 50 percent."
He said he expected foreign companies to take a large share of the corporate
voice and data market.
"Foreign carriers' targets are multi-national companies. That is not a very big
share of the total market. But they can get such enterprises' market...Maybe
they would also get a bigger share of the data market," he said.
But the Japanese government will retain tight control of the local telecoms
networks which it sees as natural monopolies. Japan has maintained its limit on
the foreign ownership of NTT.
From July 1999, NTT will be broken up into several parts with one long
distance and two local operators. But the local firms will be kept as "special
companies" with monopolies over local services.
Sakurai said this NTT structure would be maintained for the foreseeable future.
"NTT's monopoly will continue for another six or seven years...The special
company position will not change," he said.
But he said the benefits of competition would still be felt in all parts of the
Japanese market.
Since 1985, weekday daytime telephone charges for calls from Tokyo to
Osaka had fallen by some 77 percent. He said most Japanese rates were now
on a par with the rest of the developed world, although there was none of the
heavy discounting prevalent in the U.S. telecoms market.
"With telephone rates a very quick reduction has been realised. But I think it is
near the bottom. Every operator is facing very difficult management because the
Japanese economy is in slump and traffic does not grow and because of
competition. So every operator finds it very difficult to make a profit."
But he said Japan still wanted new entrants in telecoms.
"We are very transparent. I welcome foreign investors who come to Japan and
enjoy the business. It contributes to the benefit of consumers." |
