NTT to Shift Focus to Mobile, Internet

TOKYO (04/13/2000) - Recognizing an inevitable sharp fall in its fixed-line telephone business in the coming years, Nippon Telegraph and Telephone Corp.

(NTT) has outlined a business plan for the next three years that seeks to push mobile and Internet services to be worth 70 percent of the group's entire business.

Until now NTT, one of the world's largest telecommunications carriers, has been working to a plan published in 1994, although the recent pace of change in the market has been far exceeding expectations, the carrier said in its report.

The company cited recent studies that predicted mobile subscriptions in Japan will reach 80 million in the fiscal year ending March 31, 2003, and that 50 percent of the population of Japan, some 60 million people, will be accessing the Internet through fixed-line services by the same time.

Total Internet use by percentage of population, including both fixed-line and mobile access, is expected to pass that of the U.S. in fiscal 2001 and hit 80 percent penetration by fiscal 2003, putting Japan in the world No. 1 spot, said NTT, quoting a recent report by its InfoCom Research unit.

With this as a background, the next three years will see more work being put into expanding the company's fast-growing data and mobile business, it said.

In the Internet arena, the company will work on development of both infrastructure and services.

Cheaper full-time access will be offered to consumers from May with the reduction of prices for its full-time ISDN (Integrated Services Digital Network) access service from 8,000 yen (US$75) to 4,500 yen, and NTT pledged to continue roll-out of its ADSL (Asymmetric Digital Subscriber Line) service in line with demand.

The company will also begin offering the ability to directly connect to its service through fiber-optic cables. A flat-rate charge of approximately 10,000 yen per month will be levied on users of the service, which will permit data speeds of up to 10M bps (bits per second) for Internet access.

NTT DoCoMo Inc., the company's mobile carrier, will continue to spearhead work in the cellular sector. By this summer its i-mode cellular Internet service will become a standard feature on all new handsets and Java-compatible handsets will also begin to be introduced to enable the rollout of more advanced services.

The company is also on track to become the first mobile carrier in the world to roll out a third-generation wireless service. Currently scheduled to launch it in May 2001, NTT DoCoMo is waiting on final approval from Japan's Ministry of Posts and Telecommunications.

NTT also repeated its wish to spread its influence overseas through its NTT DoCoMo mobile unit and long-distance and international carrier NTT Communications Corp. The mobile unit will build "investment and financing ties with the world's major telecoms players and actively engage in business development with an eye to the full-scale deployment of mobile multimedia services in the U.S. and Europe," it said. Additionally, the two units will work on building a worldwide IP (Internet Protocol) network.

In the area of research and development, NTT said it plans to pursue the area of photonic networking and hopes to develop a DoPN (Data over Photonic Network) system for future high-bandwidth communications networks.

Other areas of work will include Internet e-commerce platforms, content-sharing and copy-protection systems, small-office and home networking solutions and a service to allow mass users to publish their own content, including video images.

The new focus is expected to help the company's bottom line, with NTT predicting consolidated operating revenues of 11.5 trillion yen in fiscal year 2003, up 1.1 trillion yen on the 10.4 trillion yen it expects to report for fiscal year 2000 -- the year just ended. Operating income will climb from 0.9 trillion yen in fiscal 2000 to 1.1 trillion yen, said NTT, and recurring profit is expected to jump from 0.7 trillion yen to 1.0 trillion yen.

NTT, in Tokyo, can be found online at http://www.ntt.co.jp/.

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