 Japan: Telecoms and technology background
FROM THE ECONOMIST INTELLIGENCE UNIT
As well as being a technology powerhouse, Japan is a leading innovator in global telecommunications and information technology. When it comes to mobile communications, countries throughout the world frequently look to Japan to see the future of their own mobile market. Japan is also a global leader in terms of broadband penetration, and e-commerce is growing rapidly. In information and communications technology (ICT) equipment, Japan is home to a score of global brands, such as Sony, NEC and Fujitsu.
The Japanese telecoms market is dominated by Nippon Telegraph and Telephone (NTT). Despite a proliferation of new entrants into the sector, NTT still controls 90% of the local call market and is able to limit competition by charging high interconnection fees to rival firms. NTT is also the leading player in a number of other areas—not least mobile telecoms, through its NTT Mobile Communications Network (NTT DoCoMo) arm. Despite NTT DoCoMo’s overall dominance in the mobile sector, the country’s number-two telecoms carrier, KDDI, has claimed the lead in the rapidly growing market for third-generation (3G) services, which offer high-speed picture and data download facilities.
The Japanese government has prioritised reform of the telecoms sector, recognising it as an important source of economic growth. The continued dominance of NTT suggests, however, that the reform process remains incomplete. The Ministry of Internal Affairs and Telecommunications is responsible for regulating the sector. Cyber-crime remains a concern for the government, particularly in view of the weakness of current laws.
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SOURCE: The Economist Intelligence Unit
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