Nippon Telegraph and Telephone Corp. made a fresh start Thursday as a group of companies under the control of a holding company. As Japan's largest telecommunications company, NTT is expected to play an even larger role in a broad spectrum of activities. With competition heating up at home and abroad, however, success is by no means assured. The challenge for the "new" NTT is to boost its competitiveness by providing cheaper, better and more efficient services.
The NTT group has two regional carriers serving western and eastern Japan respectively and a third carrier providing long-distance and international services. The group also includes NTT DoCoMo, the cell-phone unit, and NTT Data Corp. With annual sales of over 10 trillion yen, the NTT family is the world's largest communications conglomerate. There is no assurance, however, that it will win the global race, given tough competition from U.S. and European rivals and a wave of large-scale mergers and acquisitions sweeping the communications industry.
NTT reorganization has been a hard nut to crack ever since its state-owned predecessor was privatized in 1985. The biggest issue was whether to break up the giant corporation into independent units. The Ministry of Posts and Telecommunications called for a complete breakup, but NTT vehemently opposed that course. The dispute continued until 1996, when the two sides reached a deal to split NTT under a holding company.