fwiw, AboveNet's name-dropped in here a few times -- a follow-up to their deals in Japan.
culled off DJ Interactive, hence the omission of a more eye-appealing url.
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Moving, Shaking Japanese Style
02/07/2000
ISP Business News
By Ruth Suarez
The Japanese Internet market has plenty to offer entrants.
Japan has more Internet users than any other Asian country. According to San Jose, Calif.-based Dataquest [GART], Japan generated $1.4 million in online and Internet access revenue in 1998, compared to $873,000 for the rest of the Asia/Pacific region.
Industry players such as PSINet [PSIX], Exodus Communications [EXDS], AboveNet Communications [MFNX], Portal Software [PRSF] and iAsiaWorks are chipping away at the Japanese Internet market through partnerships and acquisitions.
PSINet is anxiously peddling its service to grab a bigger piece of the market. The ISP tucked three acquisitions under its belt in 1998. Among PSINet's collection of Japanese acquisitions: RimNet Corp., one of Japan's pioneer dial-up companies; TWIC Co., an online service; and Tokyo Internet Corp., an ISP. Its earliest Japanese acquisition was IIKK Intercom International in 1994, which became the basis for PSINet Japan.
In Japan, market dynamics are shifting with deregulation, and smaller players are bucking against former state monopoly Nippon Telegraph and Telephone Corp. [NTT]. Three Japanese telecommunications companies announced plans Dec. 16 to join forces to compete with NTT. DDI Corp, a national carrier, KDD Corp., an international carrier, and IDO Corp., a cellular carrier, will merge to become $21.2 billion DDI Corp. The newly formed carrier will be Japan's second largest telecom company. The deal will not be complete until next fall.
Other telecom players are adhering to the "if you can't beat 'em, join 'em" motto. Since Japan's NTT isn't loosening its white-knuckled grip on the Japanese market, U.S.-based companies are partnering with the monopoly. Armonk, New York-based IBM Corp. [IBM] and Austin, Texas-based Tivoli Systems Inc. are partnering with NTT's E-Business Outsourcing program. Their service, launching in April 2000, will provide enterprise customers with consulting, design and implementation of managed computer networks, as well as outsourcing services for corporate intranet, extranet and Internet servers.
Britain's Cable & Wireless [CWZ] announced Dec. 14 it would snap up a 20 percent to 30 percent stake in local provider Tokyo Telecommunications Network Co., known as TTNet. TTNet's nationwide fiber optic network is attracting other big name suitors, such as MCI WorldCom [WCOM]. However, this isn't Cable & Wireless' first visit to the country. Earlier this year, the cable giant tussled with NTT and won, acquiring IDC, an international call operator.
U.S.-based telecom players would be wise to put together business strategies for the Japanese marketplace. One vendor attempting to jump ahead of U.S. competitors in Japan is Santa Clara, Calif.-based Web hoster Exodus Communications Inc. [EXDS], which in December acquired Global OnLine Japan, a Web hoster touting 23,000 subscribers. Neither company disclosed terms of the deal. No sooner had the ink dried on that merger, Exodus was already busy touting a Jan. 19 partnership with Nomura Research Institute, a Japanese system integrator. Through the alliance, Exodus plans to expand its Tokyo Internet Data Center.
AboveNet Communications Inc., a subsidiary of Metromedia Fiber Network Inc., also is extending its Internet network into Japan by partnering with Marubeni Corp. and Trans Cosmos Inc. The joint venture will streamline the flow of Internet traffic within Japan and between Japan, the United States and Europe.
AboveNet Japan will build an Internet service exchange facility in Tokyo modeled after AboveNet's facilities in the United States and Europe. The facility, which will target Japanese ISPs, content providers and e-commerce companies, is expected to open in the second quarter of 2000.
Yoshiaki Matsuda, AboveNet director of international business development, says vendors hoping to establish partnerships should follow these steps:
* Conduct extensive market research, study pros and
cons of each category of potential partners, i.e.,
carriers, manufacturers, and trading companies;
* Narrow down potential partners for selection; and
* Outline a joint venture deal with partners and negotiate
the deal.
Cupertino, Calif.-based Portal Software Inc., an ISP infrastructure software vendor, also is setting up shop in Japan. Its new Tokyo-based unit, Portal Software Japan, will focus on emerging Internet services such as wireless IP.
"For those aspiring to gain entry into the volatile market, grab a partner. Otherwise, it's a tough road," Network Dynamic Associates' Ken Zita says. "You need some sort of entry vehicle, a distribution channel to get to customers. You don't just go in there and throw up a shingle and hope it works." |
