In 1984, the NTT Law was enacted to foster a vibrant private sector in Japan's telecommunications industry, which was previously a centralized monopoly under the former state-owned Nippon Telegraph and Telephone Public Corporation. The NTT Law was designed to foster technological innovation and international competitiveness in Japan’s telecommunications sector, and to enable its societal and economic development.
Against this backdrop, the public corporation was privatized to form the current Nippon Telegraph and Telephone Corporation (NTT) in 1985. Due to its previous history as a state-owned corporation, NTT inherited assets and facilities essential to Japan’s telecommunications infrastructure. Also, under the NTT Law, the Government of Japan holds approximately one-third of NTT’s shares.
Since August 2023, discussions have taken place within Japan’s ruling party, the Liberal Democratic Party (LDP), and at the Ministry of Internal Affairs and Communications about the possibility of completely privatizing NTT and abolishing the NTT Law.
In response, however, 180 entities, including telecommunications operators and local governments, jointly signed and submitted a request to the LDP and the Minister for Internal Affairs and Communications on October 19 to oppose the abolition of the NTT Law and call for careful policy discussions.
Shortly after submitting the joint request, leaders of three major telecommunications operators, KDDI Corporation, SoftBank Corp. (TOKYO: 9434) and Rakuten Mobile, Inc., held a press conference to explain why they are opposed to abolishing the NTT Law.
In favor of revising the NTT Law, but opposed to its abolition
KDDI’s President, Representative Director and CEO, Makoto Takahashi explained the purpose of the request, noting that its central focus is to ensure fair competition. He reported that 180 entities, including mobile network operators, cable TV providers, Internet service providers and local governments, joined as signatories. "While we’ve submitted jointly-signed requests before, having 180 entities sign on is probably a first," he said.
Takahashi explained that while the signatories support a review of the NTT Law to improve Japan’s quality of life and promote its economic development, they oppose the outright abolition of the NTT Law as it could potentially harm the public interest. He stressed that the signatories believe that a more careful discussion should take place.
Takahashi also highlighted the shared concerns of the signatories, assuming the NTT Law were to be abolished.
- NTT and its group companies, which have inherited telecommunication assets and critical infrastructure from the public corporation era, could hinder a fair and competitive environment, potentially leading to higher user fees and less innovation.
- If NTT no longer assumes the role of a last-resort provider for essential services, it may become difficult to maintain a reliable, secure, robust, high-speed, and high-capacity communication environment nationwide.
- Market dominance by NTT and its group companies could lead to the exclusion of regional providers, resulting in a decline of local services.
Speaking from a KDDI perspective, Takahashi said, “We’re in favor of revising the NTT Law to keep with the times, but we oppose the abolition of the NTT Law because it could harm the public interest. It’s necessary to ensure fair competition between the NTT Group and other businesses in the industry, and for NTT to uphold its obligation as a provider of last resort, and for it to safeguard its assets related to essential communications."
Regulation needed to operate Japan’s public assets
Junichi Miyakawa, SoftBank’s President & CEO, commented, "We’re in favor of revising the NTT Law, but absolutely opposed to its abolition. NTT owns public assets that were developed during its time as a public telecommunications company. Unregulated use of these assets would run counter to the convenience of citizens and hinder fair competition. We believe that regulation is needed for the operation of Japan's unique and essential public assets."
Fair competition essential for low-cost, high-quality services
Rakuten Mobile’s Representative Director and Co-CEO, Kazuhiro Suzuki, said, "We strongly oppose the abolition of the NTT Law because we believe that low-cost, high-quality services and lower mobile phone prices have resulted from fair competition. The special assets that NTT possesses are rights that all citizens should have equal and fair access to.”
For more information, see this press release.
(Posted on October 23, 2023)
by SoftBank News Editors