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Strategies & Market Trends : World Outlook -- Ignore unavailable to you. Want to Upgrade?


To: Glenn Norman who wrote (724)5/12/2000 11:42:00 AM
From: Don Green  Respond to of 48935
 
EDITORIAL: NTT Rate Dispute At Core Of Telecom Policy
Thursday, May 11, 2000
TOKYO (Nikkei)--The trade row between Japan and the U.S. over interconnection fees charged by Nippon Telegraph and Telephone Corp. (9432) goes to the heart of Japan's telecommunications policy, which has distorted the competitive landscape of the industry.

The U.S. wants NTT, a 59% state-owned telecom firm, to cut the rates it charges competitors to access its local phone lines by a total of 41.1% to enable more competition, with a 22.5% cut within two years. Washington has dismissed Japan's offer of a 22.5% cut over four years as too little, too late because it believes NTT charges up to five times American rates and double British and French fees.

Japan insists that is the best NTT can do without seriously damaging its financial health.

NTT's individual and corporate customers take a dim view of the company being allowed to enjoy a near-monopoly in local telephone traffic and protect its wage structure and working conditions, because they have been forced to endure painful restructuring that has entailed heavy job cuts.

But NTT has political allies within the ruling Liberal Democratic Party who are willing to come to its rescue. One proposal being mulled is to allow the two regional telephone firms created through NTT's reorganization last year to expand into long-distance and mobile phone services. NTT has reportedly been lobbying for the easing of restrictions on regional company operations to obtain additional sources of revenue.

Nevertheless, it was NTT itself that rejected a proposal to give the regional carriers complete independence as fully unregulated companies when NTT was under pressure to reorganize. NTT secured their monopoly on local services in exchange for government control of rates and curbs on operations.

Consequently, the reorganized NTT was launched in July 1999 based on the revised NTT Law. It consists of the two local carriers, NTT East Corp. and NTT West Corp, and a long-distance/international operator called NTT Communications Corp., plus an army of subsidiaries and affiliates overseen by a holding company, including the high-flying mobile telephone service provider NTT DoCoMo Inc. (9437).

Unlike the break-up of AT&T, NTT's reorganization has not rolled back old monopolies or led to a reconfiguration of the competitive landscape. If NTT's regional companies are permitted to operate in long-distance and mobile phone markets as well as maintain their monopolies, the anti-competitive nature of the Japanese telecom market will be perpetuated. If NTT says the current set-up for the local companies has flaws, then the whole structure of the market must be revised.

Meanwhile, the NTT group is accelerating its aggressive strategy of global expansion. NTT Communications has taken over U.S. Web site manager Verio Inc., while NTT DoCoMo has decided to buy a 15% stake in the mobile phone business of Dutch carrier KPN Telecom NV. It is also believed to have its eye on a major British mobile phone company.

With NTT pursuing its goal of overseas expansion, it should not try to put up barriers to the entry of foreign players into the Japanese market. If NTT wants its regional service companies to be freed from regulatory shackles, it should be willing to undertake a fundamental review of its organization, possibly leading to an AT&T-style breakup.

The question of whether the government will tighten its grip on NTT and force it to cut its rates further, or overhaul the market again to make it more competitive must be answered because it cuts right to the core of Japan's telecom policy.

(The Nihon Keizai Shimbun Thursday morning edition)



To: Glenn Norman who wrote (724)6/21/2000 2:29:00 PM
From: Don Green  Read Replies (1) | Respond to of 48935
 
Pieces Falling In Line For Rate Hike From Japan by Angelo F. DeJoy

The Nihon Keizai Shimbun released the results of a survey performed on June 12 today, which revealed that summer bonuses this summer rose by 1.16% over the summer of 1999. Amid impressive profit growth among Japanese firms, where Jan Mar profits rose 38%, firms have been increasing capex, which rose in the Jan Mar period by 4.2%.

The rise in summer bonuses is likely be supportive of the yen, given that the BoJ said recently that it sees summer bonuses as a key component to determine whether deflation is easing and when the Bank should move from its 16 month zero interest rate policy. Further evidence coming from Japan trade data suggests deflation in Japan may soon be that of the past. The MoF said today that Japan?s Custom Cleared Trade Surplus fell in May by 29.0% on the year to 582.4 billion yen, well below expectations of about 800 billion yen. Although exports rose by 8.2%, the seventh straight rise amid a strengthening Asia, imports rose a whopping 19.4% on the year due to soaring oil prices and increased domestic demand. Yesterday, the EPA upgraded its assessment of the economy amid movement toward self-sustaining recovery, mainly on corporate activity was slightly more optimistic than last month?s report, which said only that such movement was gradually appearing. The report added that the fall in consumption was showing signs of coming to halt, adding that the drop in household incomes is nearing an end.
-June 20



To: Glenn Norman who wrote (724)8/10/2000 10:57:17 PM
From: Don Green  Read Replies (1) | Respond to of 48935
 
Life in Tokyo is world's costliest
MITI blames appreciation of yen for results of survey, which compared 88 goods and services in major centers
August,2000

YUMIKO SUZUKI
Staff writer


The cost of daily living in Tokyo was higher than in any other major world city in 1999, according to a survey released last week by the Ministry of International Trade and Industry.

Examining 88 goods and services, the ministry determined that the price gap between Tokyo and other cities widened in almost every item last year.

According to the survey, overall prices in Tokyo were 1.60 times higher than those in New York, 1.48 times higher than in an aggregate of three major cities in Europe - London, Paris and Frankfurt - and 2.03 times higher than in Singapore.

In the previous year's survey, Tokyo prices were 1.52 times higher than in New York, 1.19 times higher than in the European cities, and 1.73 times higher than in Singapore.

The ministry attributes Tokyo's higher prices to the yen's 15-30% appreciation against other major currencies. But some economists question the items selected by the ministry. "I doubt all the items the survey covers are the kinds of goods Japanese consumers actually buy," said Susumu Takahashi, chief economist at the Japan Research Institute.

While prices of cameras, home appliances, automobiles and motorcycles in Tokyo were lower than those in some other cities, the price gap for services was much bigger than that for consumer goods. Fees for gyms in Tokyo were 3.58 times higher than in New York and 2.51 times higher than in European cities. Monthly fees for fitness and swimming clubs, cooking classes and foreign language schools were 2.14 times higher in Tokyo than in New York and 2.61 times higher than in Singapore. In a related cost survey, MITI found charges for nursing care were also higher in Japan than in the U.S. and Germany.

Responding to the spread of business-to-consumer online trading activities, the ministry also surveyed the prices of goods sold over the Internet by Japanese, U.S. and German firms. The study revealed that the average price of goods sold locally online by Japanese companies was 1.46 times higher than in New York and 1.29 times higher than in Frankfurt.

At the time of the survey, held in November 1999, $1=106.31 yen, while 1 pound=174.57 yen, FFr1=16.82 yen, DM1= 56.4 yen and S$1=64.1 yen, compared with $1=122.47 yen, 1 pound=205.98 yen, FFr1= 21.89 yen, DM1=72.74 yen and S$1= 74.76 yen the previous year.

"I think the higher yen must have offset some of the effects of price lowering," said Akiyoshi Takumori, chief economist at Sakura Securities Co. But, he said: "Since the Japanese economy got back on a recovery path last year, not all prices of goods have been down - some have been rising."

Takumori noted that prices have stabilized globally. "Take the EU, for instance. The region's consumer price index rose only about 1% last year thanks partly to monetary unification effects. Prices of some goods might have dropped more in European countries than in Japan," he said.

But he also questioned the way the survey was conducted, saying prices of goods sold at a volume seller differ considerably from those at a department store offering little discount. MITI officials said they checked the price of each good sold at a department store, a specialty store and a discount store. But they declined to reveal the exact names of the stores they checked with.

Japan Research Institute's Takahashi is more critical of the survey. "The yen's sharp appreciation must have helped widen the price gap between Japan and other countries. But I doubt the survey reflects the real condition. Since consumer prices have been falling a lot in Japan, it could have offset the effects of the higher yen," he said.

However, Takahashi acknowledges that public utility charges and some other costs like bank fees and rent for housing as well as prices of goods sold online are still higher in Japan. "These areas lack serious price competition. Both prices of goods and services offered over-the-counter and those sold online could fall further in Japan with additional deregulation and streamlining of distribution system," he said.



To: Glenn Norman who wrote (724)10/2/2000 1:30:15 AM
From: Don Green  Respond to of 48935
 
High-tech demands strain power grid
Posted at 9:52 p.m. PDT Sunday, October 1, 2000
BY MATT MARSHALL

Mercury News

During a summer of rolling blackouts and rising power rates, one silent culprit is adding unexpectedly to the shortages: the new, spreading e-world of networked computers.

E, after all, means e-lectricity, as well as electronic.

Over the past three years alone, U.S. corporations have spent $1 trillion installing a vast world of wiring used now for everything from e-mail to e-business, and it all depends on -- surprise, surprise -- a constant, reliable flow of electricity.

``Every single piece of it gets plugged into a wall somewhere,'' said Mark Mills, an energy consultant and co-author of the Digital Power Report.

Experts differ on how much the needs of high-tech equipment, as well as the economic expansion that it has spurred, have boosted the demand for electricity. But according to the Edison Electric Institute in Washington, D.C., they've added about one percentage point per year to the growing demand for power nationally since 1990.

In California, the high-tech revolution has consumed even more electricity -- an extra two to four percentage points each year of power over the amount originally predicted, the institute says. In 1988, the California Energy Commission believed the state would need 54,000 megawatts of power by 2000, partly to accommodate robust economic growth. But this year California actually required 56,000 megawatts.

That difference is enough to power about 2 million homes. ``There's no getting around it,'' Mills said. ``Cyberspace, far from virtual, is very real and anchored in electrons.''

Depending on whom you believe, high technology consumes from 3 percent to 20 percent of the nation's total power generation, and some expect that number to rise to as high as 40 percent by 2010. ``Whether that number is 5, 10, 30 or 40 percent, is open to question,'' says Jim Owen, spokesman of the Edison Electric Institute.

The added demand from the e-world couldn't come at a worse time. California is now caught in a serious electricity shortfall for various reasons: an unexpectedly hot summer, aging power plants that are prone to break down, years of poor investment in new plants and the new efforts at deregulation in the state.

Imbalance since 1995

For the past five years, the supply of electricity statewide has grown much more slowly than the demand for it from companies and residents. Supply and demand were in balance until about 1995. Since then, supply has grown only 1 percent, while demand has expanded by 11.5 percent, according to the California Energy Commission.

For the Bay Area, state officials say there exists a shortfall of around 900 megawatts, or enough electricity to power about 900,000 homes. ``You guys in California are the biggest energy hogs around,'' says Michael Economides, professor of chemical engineering, who has studied power consumption. ``Take a house with three teenagers. You have six phone lines, recharged cellulars, car phones and computers.''

San Jose, for example, sucks up about 2,535 megawatts from outside the city and produces only 165 for itself, according to Stephanie McCorkle, spokeswoman at the state's Independent System Operator, which controls the purchasing of much of California's power. To make up the difference, the city needs to draw on outside sources that are limited themselves, since they come from other areas that are also growing quickly.

With the state running beyond capacity, local power officials are warning of blackouts in the summer.

When a rolling blackout hit Silicon Valley on June 14, several companies were alarmed. They stepped up talks within a task force of the Silicon Valley Manufacturing Group about ways to conserve energy use and to minimize the burden on the local power grid.

Expensive outages

Sun Microsystems Inc. has estimated that a blackout costs up to $1 million per minute, according to Larry Owens, division manager of customer services for Silicon Valley Power, the utility that manages power for many large companies in Santa Clara County.

Chuck Mulloy, spokesman for Intel Corp., said that if one of its fabrication plants shuts down, ``it could cost millions, depending on the circumstances.''

Nevertheless, many computer companies are reluctant to talk about their power needs, saying that it will alert competitors about their cost structures.

Some say they're confident the Bay Area shortfall can be patched up over the next couple of years through a variety of measures, including building local power plants and transmission stations. Local generation is important, experts say, because it prevents voltage instability, which can seriously harm high-tech computer servers that require high reliability.

For some of their most precise equipment, Internet economy companies need what's called ``five 9s'' -- or 99.999 percent reliability -- to ``nine 9s'' or 99.9999999 percent reliability.

This, in turn, requires backup hardware, backup generators, backup batteries, switches and software, said Mills, the energy consultant. The need for local power is one of the issues in the debate surrounding the proposed Calpine plant for Coyote Valley, which, if approved, would go online by 2003.

Cisco Systems Inc., which is proposing to build a campus in the area, has opposed the plant for health and safety reasons. Cisco's officials say that a patchwork of other plans already in place -- including building two power plants in Pittsburg, and others San Francisco, Contra Costa and San Mateo counties -- will eventually generate enough electricity to avoid building another plant.

In high demand

Meanwhile, many of the new e-businesses have a voracious appetite for electricity. Exodus Communications Inc., Intel and Inktomi Corp., for example, have erected massive Web-hosting and data centers that use about 10 times the amount of electricity per square foot of a typical commercial building. For example, a 100,000-square-foot Web-hosting center built by Exodus consumes enough electricity to power 100,000 homes, estimated Ed Quiroz, regulatory analyst at the Public Utilities Commission in San Francisco.

``They've completely caught projections off guard,'' he says. ``It's a huge growth industry. The limiting factor is going to be the reliability of electricity.''

And there's no sign that the demand for power in Silicon Valley will slow any time soon.

Mills said the amount of electricity consumed by watching a movie by video-streaming over the Internet is 20 times more than that used to watch the same movie on television.

Mobile phones, he said, use about three times the amount of electricity that normal phone lines do because they operate by bouncing signals off of base stations. All of these will be on the rise, he pointed out, especially in Silicon Valley.

``The buildup of the Internet has just begun,'' he says. ``And in the valley, there's a shadow of electricity growing behind it.''



To: Glenn Norman who wrote (724)10/3/2000 7:26:39 PM
From: Don Green  Respond to of 48935
 
BOJ Watch: Tankan Results Not Good Enough To Lift Markets
Wednesday, October 4, 2000
TOKYO (Nikkei)--Improvements in September's tankan quarterly survey of business sentiment, released Tuesday, are in line with the Bank of Japan's monthly economic report, which stated that the domestic economy is gradually recovering.

The gains in the closely watched tankan were within the realm of expectations, so the figures generated little response in the markets.

The diffusion index for business conditions at large enterprises rose 7 points from the previous June survey, but the consensus among market participants was that the tankan highlighted the growing disparity in outlook based on factors like corporate size and sector.

Despite confirming that the economy is gradually recovering, the tankan's results did not show that Japan is on a path to self-sustaining growth, analysts say.

BOJ executives are also cautious about the latest results. "This is an economic recovery amidst continued corporate restructuring, so we could still see weak sentiment for some time," a central bank executive says.

After the elimination of the zero interest rate policy, sentiment spread that the BOJ would quickly implement additional interest rate hikes, but such thoughts have now vanished, market watchers say.

Instead, the September tankan is regarded as highlighting the need for the BOJ to maintain an accommodative stance to support the economic recovery.

The Nikkei Stock Average on Tuesday advanced again, but it barely managed to eke out a gain, rising less than 10 points.

"The tankan's results were not good enough to give a boost to share prices," another BOJ executive says.

(The Nikkei Financial Daily Wednesday edition)



To: Glenn Norman who wrote (724)3/7/2001 11:50:56 PM
From: Don Green  Respond to of 48935
 
CHRONICLES: Mori's Behavior More American Than Japanese
Thursday, March 8, 2001
TOKYO (Nikkei)--When I was living in the U.S., I was involved in a car accident. The car in the next lane was weaving and struck my vehicle. The other driver, an elderly attorney, was clearly the one at fault and apologized profusely.

But just as I was thinking what a true American gentleman he was, the police arrived and his attitude changed completely as he insisted to the authorities that he had done nothing wrong.

The other day I saw an NHK special entitled "Crisis Management in Question" about Bridgestone/Firestone's massive tire recall due to allegations that the tires were responsible for rollover accidents.

Even before the cause of the accidents had been clearly established, the Japanese chairman of the company issued an apology to the victims. This action, which would only seem reasonable and natural in Japan, touched off a firestorm of anger and widespread criticism in the U.S.

In contrast, the automaker that installed the tires on its vehicles adamantly insisted at a U.S. congressional hearing that the tires were the source of the problem, deftly dodging responsibility.

Apparently in the U.S., a public apology is taken as an admission of guilt. The U.S. motto seems to be that one must always protect oneself.

Watching the U.S. naval inquiry into the sinking of the Ehime Maru by an American submarine, it is shocking to see the huge difference in values between the U.S. and Japan.

"The commander did nothing wrong," insists the attorney representing Scott Waddle, the submarine's commander at the time of the collision.

He argues that "The accident was caused by a series of errors." This statement is utterly incomprehensible to the Japanese, whose first thought would have been to apologize.

But then again, Japan is currently led by a prime minister who, with his insistence that there are no legal or tax problems with his acceptance of a membership in an exclusive golf club, seems to have taken U.S.-style values to the next level.

(The Nihon Keizai Shimbun Thursday morning edition)



To: Glenn Norman who wrote (724)4/21/2001 10:47:24 PM
From: Don Green  Read Replies (1) | Respond to of 48935
 
Yo_ Norman

How are you doing???

Morgan Stanley To Invest Heavily In Japanese Property
Sunday, April 22, 2001
TOKYO (Nikkei)--Morgan Stanley plans to invest 5 billion dollars over the next three years in Japanese real estate, The Nihon Keizai Shimbun learned Saturday.
The big U.S. investment bank hopes to cash in on a depressed real estate market expected to come back to life with the lifting last November of a ban on Japanese real estate investment trusts.

A boom is anticipated despite the continuing decline in land prices, which were down 4.9% on average at Jan. 1 from a year earlier, the Land Ministry reported last month.

Morgan Stanley plans to buy office and apartment buildings, mainly in greater Tokyo, believing that some prices in the capital have bottomed out.

It has already snapped up the Ebisu Prime Square development in Tokyo's posh Ebisu district from failed Chiyoda Mutual Life Insurance Co. for some 40 billion yen. The property comprises a 62-unit apartment building, a 22-story office building and three commercial wings and has a total floor space of 70,000 sq. meters.

(The Nihon Keizai Shimbun Sunday edition)