Telecommunications

May 2002

The Telecommunications Ministry will further deregulate admission into telecommunications market autumn next year. The ministry will abolish the requirement to notify the ministry when firms change phone charges/offer new services and by lifting further restrictions on service fees and the Nippon Telegraph and Telephone Corp. (NTT) group. The planned measures will allow non-NTT companies to freely offer deep discounts to corporate customers, and give NTT more leeway in the high-speed Internet service. Once implemented, the Japanese market will become as free as in the U.S. The proposed deregulatory measures will be announced by the ministry's advisory panel on June 4. Currently, non-NTT companies are required to inform the ministry whenever they change phone charges or begin offering new services. Plans also call for allowing NTT group companies to start a high-speed Internet service without obtaining the ministry's approval. They would just have to inform the ministry of their decision. The measure could open various options for the NTT group's new businesses. NTT East Corp. and NTT West Corp., NTT's regional carriers, would be able to freely offer customers use of both their Internet and regular phone services at a discount. When companies with their own telecom infrastructure try to enter the phone business, they will be allowed to apply without waiting for the ministry's approval. The ministry also intends to introduce uniform regulations for companies intending to enter different segments of the telecom market, such as voice communication, phone line leasing and data communications. Separate rules currently apply to each type of business activity. (May 27, the Nihon Keizai Shimbun)

The Ministry of Telecommunications is reviewing to abolish an authentication system to ensure the quality of cell phones, facsimile machines and other telecom equipment, with the change likely to come in fiscal 2003. The quality standards attained in the telecom industry are now high enough to obviate the need for the certification. Instead, each manufacturer will be required to make checks on its own and will be responsible for any malfunctions. If substandard products are discovered, manufacturers will be urged to recall them. Currently manufacturers are obliged to obtain the approval of government-designated authentication bodies each time they develop a new model of such things as modems, mobile phone handsets, fixed-line telephones and facsimile machines. Organizations such as the Telecom Engineering Center and the Japan Approvals Institute for Telecommunications Equipment provide about 5,000 certifications a year. The authentication process costs about 500,000 Yen per product and takes nearly three weeks. The move to self-certification will allow Japanese manufacturers to speed up the development process and increase their competitiveness as well as facilitating the entry of European and U.S. producers into the Japanese market. The ministry will form a task force to discuss the change and aims to submit a related bill to the Diet next year. (May 16, the Nihon Keizai Shimbun)