Strategies for next-generation fixed line service in Japan

Abstract

Although Japan had fallen far behind the United States in the extent and sophistication of its IP technology and information/communication industry, today it is beginning to catch up. By May 2003, the number of broadband Internet users in Japan exceeded 10 million, and the shift from narrowband to broadband continues to increase. Japan now enjoys one of the world's best broadband environments in terms of both pricing and speed of offerings. However, the environment for the domestic fixed-line telecommunication business is getting tougher. Demand is down, both in terms of volume and value, as traffic migrates to mobile communication technologies. For NTT's regional carriers, NTT East and NTT West, prospects for sales growth are slim, making cost reductions vital if those companies hope to remain profitable. It is imperative for NTT East and NTT West to expand into the broadband-related business as well as to slash costs further. In this thesis, I analyze industry structure, market trends, and the position of companies within the fixed-line communication industry in Japan. I also identify NTT's strategies for next-generation fixed line services, which I believe can still make a substantial contribution to the industry and to revitalizing the Japanese economy.