Tuesday, June 06, 2006

Japan Telecom: NTT Breakup Suggested

In the wake of the ISPCON announcement from Frank Muto at WBIA that a civil anti-trust suit was forthcoming against the Bells -- and the solution sought after is Structural Separation. After all, BT in the UK had to break up. (But DT in Germany is still one giant monopoly). Here's the news from Japan - take heed of the similarities:
Nippon Telegraph and Telephone, the world's biggest telecoms group, should be broken up into several independent entities to boost competition in the domestic telecoms industry, according to recommendations from a government panel. Advocates of a break-up of NTT say it could stimulate competition particularly in fixed-line services. Analysts regard the Japanese telecoms industry's biggest weakness as NTT's almost monopolistic control of phone lines going into homes, known as the "local loop". However the report, which recommends NTT be disbanded in about 2010-2011, is likely to face strong opposition from some politicians as well as NTT itself. NTT currently has five operating subsidiaries: NTT DoCoMo, Japan's largest mobile carrier; NTT Communications, which provides long-distance fixed-line calls; NTT East and NTT West, which provide local calls in the two halves of Japan; and NTT Data, the computer services company. The home affairs ministry official said under the panel's recommendations, NTT DoCoMo, NTT East and NTT West would likely be among the subsidiaries fully hived off as independent entities. The official said the logic of breaking up NTT was to increase competition. To achieve this, it is understood the report also recommends a relaxation of the regulations governing NTT's various companies, to give them a freer hand to enter markets and vie with each other. But the official said that if NTT were broken up, there would still need to be some regulation of NTT East and NTT West, given their huge market power. The two together account for more than 90 per cent of local fixed-line telephone calls, and each dominates its own half of Japan. For some, the recommendations do not go far enough. Sachio Senmoto, chief executive of eMobile, which recently received one of three new mobile phone licences offered by the government, has called for NTT DoCoMo itself to be broken up. NTT DoCoMo has a more than 50 per cent share of the mobile sector.

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