Japan's NTT goes global with new company

Nippon Telegraph & Telephone (NTT), Japan's largest telecommunications company, said yesterday it has set up a new company that from October will begin selling international voice and data communications services.

The company, NTT Communications Corp, expects revenues of 100 billion yen ($A1.29 million) within its first three years of business and will offer services to consumers and corporate customers. The Tokyo-based company will employ 6600 people and be initially capitalised at 72 billion yen, officials said yesterday.

Though NTT is hardly a household name outside Japan, the company has grown to be one of the world's largest telecommunications operators -- despite a Japanese law that has confined NTT to its home market. With that law now lifted, NTT officials hope the new subsidiary will be the vehicle that reshapes NTT into an international force in next-generation communications.

"We would like to establish a presence as a global market player," said Masanobu Suzuki, president of the new unit. NTT Communications will build its own network to countries with high traffic flow such as the US and partner with local carriers in smaller markets, he said.

Suzuki added that as a newcomer to the international business NTT Communications will seek "alliances and partnerships with other carriers as well as IT businesses".

Suzuki emphasised the challenge NTT faces as a newcomer on the world telecom stage, characterising his company as a "challenger".

The new unit is the result of deregulation that from July 1 will split NTT into three separate companies under one holding company. NTT Communications will oversee long distance and international service while the others will manage domestic service in Japan.

The move is also part of broader deregulation of Japan's telecommunications market that is expected to spur competition here. NTT, once wholly owned by the Japanese government, is being forced by deregulation to compete with a rabble of both foreign and Japanese communications providers all shooting for a piece of the world's second largest telecom market.

NTT has already started building partnerships it hopes will help spur its international business. In Asia the company has equity investment in several carriers and this week begins detailed negotiations with AT&T over a joint venture the two companies announced in April, which will offer communications services to corporate customers, officials said.

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