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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: JohnG who wrote (337)	7/6/2000 6:33:17 PM
From: JohnG	Read Replies (1) \| Respond to of 197455

Japan to bend on NTT obscene profits. JohnG totaltele.com Japan set to relent in U.S. telecoms dispute By Linda Sieg, Reuters 06 July 2000 Japan is set to make concessions at talks next week to settle a U.S.-Japan telecoms row over rates charged by telecoms giant Nippon Telegraph and Telephone Corp (NTT) but just how far it will bend is still in doubt. Both sides are keen to resolve the high-profile row before Prime Minister Yoshiro Mori meets U.S. President Bill Clinton ahead of a July 21-23 Group of Eight (G8) summit Mori will host. Mori has made information technology (IT) the top item of the G8 summit agenda as well as a key plank in his domestic economic platform, so a failure to clinch a deal would be embarrassing. Kyodo news agency said on Thursday that Tokyo would propose at talks to start next week that NTT cut the rates it charges rivals to use the "last mile" of its local lines by 22.5 percent by the end of 2001 and 41.1 percent by the end of 2002. That would go a long way toward meeting Washington's demand that the high-cost rates be slashed immediately by 41 percent. Tokyo has officially offered a 22.5 percent cut over four years. While Japanese officials have said recently that Japan should speed up the cuts to boost the nation's lagging info-tech sector, a government source said Tokyo was unlikely to make such a drastic offer. The picture painted by the Mainichi Shimbun, which said Japan would likely offer a 22.5 percent cut over three years, was more in line with thinking at the Posts and Telecommunications Ministry, the source said. NTT LAW REVIEW Ruling Liberal Democratic Party (LDP) lawmaker Ichizo Ohara told Reuters on Wednesday that Japan looked ready to offer a cut of 22.5 percent over two years and discuss further cuts at a later date. But Mainichi said NTT's powerful political backers were balking at that proposal. Analysts have said that further cuts would depend on the fate of a planned review of the laws governing NTT, including limits on the operations of its two regional phone units. New Posts and Telecommunications Minister Kozo Hirabayashi said in an interview published on Thursday that the government planned to revise the law, paving the way for a possible break-up of the NTT group. That review could take two years. "It is vital to review the structure of NTT quickly to respond to changes in the industry," Nihon Keizai Shimbun quoted Hirabayashi as saying. Hirabayashi took office on Tuesday in a cabinet reshuffle that followed last month's general election. NTT had said drastic cuts would harm its profits and hit jobs. Its local phone companies alone employ nearly 130,000 people. But that argument has been undermined by hefty upward revisions of earnings forecasts for this business year. Now NTT wants the legal revisions to give its units greater freedom. It would also like the government to sell off its 53 percent stake to free management from bureaucratic control. The former state monopoly was rejigged only last year into a holding company with two regional phone units and a long-distance carrier. U.S. OUT FOR BLOOD? Analysts expect fresh changes as a result of the review but sceptics doubt whether a full-scale break-up of the group is in store, while critics fear NTT would emerge even stronger. Japanese players on the telecoms field - politicians, diplomats and telecoms bureaucrats as well as NTT and its rivals - look likely to jostle for position ahead of next week's talks. U.S. officials, meanwhile, may have hardened their stance after NTT's robust upward revisions of its earnings forecasts. "The U.S. might have become more bloodthirsty," said one foreign telecoms expert. "What was acceptable for a deal in March might no longer be acceptable." Assistant U.S. Trade Representative Wendy Cutler will arrive in Tokyo on July 10 and Deputy U.S. Trade Representative Richard Fisher will arrive later in the week. U.S. Trade Representative Charlene Barshefsky might also get involved if she accompanies Clinton to Japan for the G8 summit. The United States has threatened to file a complaint with the World Trade Organisation by the end of July if Tokyo refuses to cut the fees, which Washington says bolster NTT's iron grip on the world's second-largest telecoms market.