Where Is Japan Headed in 1997?
Industry Leaders Voice Their Views

compiled and translated by the editorial staff

What kind of plans do Japan's government ministries and major corporations have for the coming year, and what are their primary information technology-related concerns? To find out, we asked representatives from two ministries and five corporations, plus a university professor and a consultant, to give us their views.

All responses have been translated from Japanese. If the respondent's name is not indicated, the answers were supplied to us unattributed by one or more ministry or company representatives.

We've had to do considerable trimming of these responses to fit into the space available. However, on our website, we have the unedited version of this article.

Ministry of Posts and Telecommunications (MPT)

What are the major issues now facing the MPT?

The MPT faces some big challenges in 1997. By January, the ministry will make a final recommendation on whether NTT should be split into regional entities or kept as it is, so that the Cabinet can reach a decision and the first ordinary session of the Diet in 1997 can discuss any necessary revision of laws.

The ministry will consider the status of foreign telecommunications carriers (such as the merger of BT and MCI) with a viewpoint toward enhancing Japan's competitiveness. To promote fair domestic competition, the MPT will also decide on guidelines for interconnections between carriers -- particularly those between NTT and other carriers.

The MPT also plans to ease restrictions on the investment of foreign capital in Type I communications businesses (except for NTT and KDD). The current law permits only 33% participation (share acquisition) by foreign companies for Type I carriers, while there is no restriction on foreign participation in Type II carriers. A final decision on the matter will depend on the outcome of the Negotiations on Basic Telecommunications at the upcoming World Trade Organization (WTO) meeting, to be held in February.

Ministry of International Trade and Industry (MITI)

What are the major issues now facing the MITI?

Following up on last year's activities, in 1997 MITI will focus on establishing appropriate frameworks for electronic commerce, through the efforts of various MITI-led organizations. In particular, MITI will enhance its EDI (electronic data interchange) and CALS (continuous acquisition life-cycle support) activities by allocating about JPY21.7 billion for this purpose.

Based on a review of 19 ECOM projects, MITI feels a necessary first step is to set up a firm infrastructure for transactions between companies, rather than between companies and consumers. MITI will also clarify the business customs and systems required for the realization of electronic commerce.

The ministry has allocated JPY10 billion for its 2-year plan of ECOM activities, in which about 350 companies are currently participating. The current main projects are trials of electronic payment using credit cards.

Kokusai Denshin Denwa (KDD)

What are your plans for 1997?

KDD will continue to focus on multimedia. We plan to establish more lines in response to Internet demand, not only to the US but also to Asia. Another goal is to offer appropriate, high-capability Internet services for enterprises. We also plan to invest in overseas mobile communications carriers while working to strengthen our international competitiveness.

What current issues or events have drawn your attention?

A domestic issue we are paying close attention to what status NTT will be accorded, and what steps domestic and overseas carriers will take in reaction.

With the realization of public-leased-public line interconnection, foreign carriers will accelerate their entry into Japan's communications marketplace. International competition will continue to evolve on a worldwide scale, and international tie-ups and mergers between carriers (such as the merger of BT and MCI) is a movement that will continue.

How will KDD respond to these changes?

As a core enterprise of WorldPartners, our company is planning tie-ups with overseas carriers such as AT&T and Singapore Telecom. We would like to form partnerships with various domestic and overseas carriers (and that includes fortifying WorldPartners) to develop a diverse variety of services and to respond to the competitive situation.

On what particular areas does Japan need to focus?

To become internationally competitive, it is important to strengthen the hub function of Japan's international communications. We are promoting a plan to ring Japan's islands with a submarine, high-capacity, optical network connected to international phone lines. In order to promote this hub, further deregulation is required.

Do you have any other concerns?

With progress in deregulation, Type II carriers and Type I carriers will be able to offer exactly the same kinds of services. However, Type I carriers (relative to Type II carriers) are working under heavy regulation in the area of price approval. Equal regulations for all carriers should be implemented quickly.

At the next regular Diet session, the KDD Law will be revised. If this happens, and our company is permitted to enter the domestic communications market, 1997 will be a big turning point and an exciting year for KDD.

Nippon Telegraph and Telephone Corp. (NTT)

What are your plans for 1997?

With multimedia projects and international projects as the core of our business, we will accelerate installation of fiber-optic networks, find business opportunities overseas, and strengthen R&D activities. In addition, we will review our management structure and rationalize the organization.

What current issues or events have drawn your attention?

• Fierce mega-competition among carriers globally.

• Promotion of deregulation in other developed countries to realize fair and free competition.

And what are your action plans for 1997?

To survive in such a fiercely competitive field on a global scale, we need to provide various low-cost, end-to-end services and enhance our R&D and overseas investment. By doing this, we believe we can contribute to activation of the Japanese industry as a whole and enhance the nation's competitiveness vis-a-vis the world market.

What does Japan need to do to improve its information and communications competitiveness?

Activate software development and contents businesses, and lower service charges.

Fujitsu: President Tadashi Sekizawa

What areas will Fujitsu focus on in 1997?

Because of demand spurred by telecommunications deregulation measures, the quick spread of the Internet and mobile phones, and the expansion of these respective markets, I also see growth in personal computers, infrastructure-supporting networks, and network-based service solutions. These are the areas we are focusing on.

What current issues or events have drawn your attention?

• Deregulation, both overseas and in Japan, and the trend toward reforming the legal system;

• The trend toward standardization in network computing;

• The state of the semiconductor market;

• The merging of the communications and broadcasting industries, in the midst of continuing moves towards liberalization of communications markets.

And how will Fujitsu respond to these developments?

• By forming strategic tie-ups with enterprises worldwide;

• Putting the global network to use, picking up the pace of business operations, and trimming developmental costs;

• Shortening the product cycle and opening new markets in cooperation with other companies.

What are the IT areas Japan needs to focus on?

• Setting up a high-speed, high-capacity information communications infrastructure;

• Mining the business possibilities that gain value through the Internet;

• Creating a business marketplace and nurturing superior creators for multimedia applications;

• Relaxing regulations in appropriate fields to stimulate brisk competition.

How should Japanese enterprises apply the new information communications technologies?

Information communications technologies should be used to promote globalization and stimulate Japan's industries. A representative example is CALS, which actively uses communications to collect information from around the world, speed up decision-making, and improve white-collar productivity.

For energy resource-poor Japan, new scientific breakthroughs are an important resource. Information communications technologies should be used as a means to nurture and stimulate venture enterprises and industrial R&D.

Hitachi

What areas will Hitachi focus on in 1997?

The optical transmission, ATM network, and mobile communications businesses.

What current issues or events have drawn your attention?

The movements of our competitors, in Japan and overseas, regarding product lineups for NTT's OCN [Open Computer Network] service and the computer telephony integration market. Also, vendors' responses to the new companies being established by world's large carriers.

In the field of information technologies, what are the areas Japan needs to focus on?

The promotion and dissemination of the Internet, and nurturing an appropriate business environment; deregulation; proper use of the information communications technologies for the Japanese market; and establishment of LAN/WAN environments.

Justsystem: President Kazunori Ukigawa

What areas will Justsystem will focus on in 1997?

• Enhancement of, and development of products for, network (Internet) projects, such as JustNet;

• Enhancement of intranet software, such as JustOffice Server;

• Enhancement of componentware, such as Ichitaro 7 and Sanshiro; and

• Development of interactive entertainment products.

What current events or issues have drawn your attention?

The Internet, and object-oriented or network-oriented software development.

What are Justsystem's plans for 1997?

Through the operation of JustNet, and by using our accumulated technology, we will work actively to develop a full array of services. Tackling technologies that are key to the Internet -- like Java and network computers -- is important. Regarding network computers, Justsystem has tied up with Oracle for work in language processing software, because some aspects of the spread of network computers in Japan will be influenced by language processing.

What are the IT areas Japan needs to focus on?

Enhancing the infrastructure. Communications tariffs in Japan are very high. If the cost is not on par with the US and Europe, we cannot hope for adequate diffusion.

Professor Sachio Semmoto
Graduate School of Business
Administration, Keio University

What telecom developments in 1996 stand out in your mind?

In just this one year, the number of cellular phone owners doubled (a 2.3- fold increase) to 16.15 million cellular phones in use at the end of October. Furthermore PHS [personal handyphone system], which began service a little over a year ago, has reached 4.3 million units. So this was a year in which "personalization" of the telephone jumped dramatically. No one foresaw such a jump, thus giving rise to problems such as a dearth of frequencies and a lack of phone numbers.

What about events in other countries?

The merger agreement between the UK's British Telecom (BT) and the US's MCI Communications will spur on the globalization of communications projects. The three major groups -- Britain's BT, the US's AT&T, and the Deutsche Telekom/France Telecom group, will definitely be turning their attention to Asian (including Japanese) markets.

How should Japan respond?

The first thing is to deregulate telecommunications. Furthermore, there is a need to put each carrier, including NTT, on an even, competitive footing. That would inject rationalization, openness, and globalization into the system.

What changes lie ahead?

With approval of the public-leased-public line interconnections, enterprises will be able to utilize their internal, dedicated-circuit networks and enter the communications service sector. To compete, the existing carriers will have to lower their prices or offer value-added services.

Consultant Kentaro Fujimoto,
Cyber Commerce Department,
Nomura Research Institute

What telecommunications developments in 1996 stand out in your mind?

Internet diffusion has at last reached a decent level in Japan, and fierce competition is about to break out in the private sector. Also, a great many venture enterprises entered the information communication/multimedia field, following in the style of US enterprises. They have appeared in great numbers in the fields that are less tightly regulated.

What about events in other countries?

Information communications in Asian regions took off at a speed surpassing expectations. It will be necessary for Japan to quickly change its communications policy to respond appropriately to global mega-competition.

What are Japan's strengths?

It would be better to avoid a regional breakup of NTT. Rather, the present framework of communications businesses should be enlarged, liberalized, and reevaluated. Priority should be given to nurturing operators that can compete with NTT. Also, government measures are needed to promote competition and open up opportunities for foreign companies to enter the Japanese market.

Information communications will bring about a change in working structure, as seen with SOHOs (small offices/home offices). Venture enterprises, in particular, will use information communications as a competitive tool.