TOKYO, June 25 -- Hitachi Ltd. and NEC Corp. announced today they have signed an agreement to join forces in the business of backbone routers/switches for telecommunications carrier networks, the public and private sectors and large corporations.
The companies said they will establish a new business in Tokyo in October, with about 350 employees from both companies. It will have a capital of around 5.5 billion yen (about $46 million). Hitachi will own 60 percent of the new company, and NEC will own 40 percent. The new company will supply products to Hitachi and NEC, which will market them to their individual clients. Hitachi and NEC said they will strongly promote system integration offerings using the new company's products by combining servers with network equipment. The new company will also market its products through its business partners under the new company's own brand name.
"Under the recent expansion of the broadband network market in Japan, due mainly to the implementation of the e-Japan concept [a $100 billion project recently intiated in 2000 by the Japanese government for various Internet ventures]), there are emerging business opportunities in establishing new internet protocol-based network service infrastructure among telecom operators and service providers," said Isao Ono, executive vice president and executive officer of Hitachi. "The trend is also seen on a global scale. The strong combination of Hitachi's backbone router/switch business and NEC's development capability will create a new leading vendor in this promising market."
For more information, visit: www.hitachi.com