The convergence of telecommunications and broadcasting in Japan

Abstract

Japan has fallen far behind the United States in the extent and sophistication of its information networks and Internet use. But Japan can catch up. A combination of changes, including the rapid growth of the Internet, advances in broadband technology, the introduction of digital TV, and deregulation are driving a transformation referred to as the "convergence of telecommunications and broadcasting". At the same time, these drivers are dramatically changing the traditional industry structure of telecommunication and broadcasting, from vertical integration to horizontal stratification. Information companies need to plan strategies based on the new industry. NTT, reorganized in 1999 into a holding company system that promotes group management, has committed to an aggressive plan to deploy FTTH (Fiber to the home) everywhere in Japan by 2005. FTTH service has just begun and my research finds that NTT's decision to implement FTTH has encountered fierce competition when analyzed from the basis of Porter's Five Forces. There are fur strategic points that must be dealt with in order to win in the optical fiber service competition: 1) open access, 2) reduction in prices, 3) construction of a platform, and 4) correlation with broadcasters. In addition, cooperation with the regulatory authorities and other information companies is also required, because NTT will find it difficult to win on its own. NTT is a leader in the information/communication industry, and I believe NTT can expand its organizational capability and contribute to the development of the industry by responding to this new era.