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Telecom Trio Forms Strategic Alliance

Photonics Spectra
Jun 1999
Robert C. Pini

TOKYO -- AT&T, BT and Japan Telecom have announced a partnership in which the American and British firms will buy 15 percent stakes in the Japanese voice and data company for a combined total of $1.83 billion.

The arrangement helps open the Japanese market to AT&T and BT while boosting Japan Telecom's prominence in the country as an international carrier. In addition, Japan Telecom expects to add international business connections and experience.

The new partnership also makes Japan Telecom the sole distributor in Japan of global venture services, a branded one-stop shop for voice and data service to multinational companies. Sue Fleming, a spokeswoman for AT&T, said the global venture service will target companies in information technology, finance and petroleum. The physical layer will consist of an international fiber optic network owned by BT and a global Internet protocol network. The service already has the approval of the European Commission, and "we expect approval soon" from the US Department of Justice and Federal Communications Commission, Fleming said.

Valued at $100 billion a year, the Japanese telecommunications market is the second-largest in the world. At nearly ¥3 trillion, total operating revenues for domestic service in 1998 were down slightly more than 10 percent from 1997. Japan Telecom has seen its share of the domestic service pie grow from 15 percent in 1994 to slightly better than 20 percent last year.

Not to put all its bets on one horse, AT&T recently signed a memorandum of understanding with NTT to offer network management services jointly to Japanese corporate clients. The two also agreed to explore the potential for jointly offering network management services in other Asia-Pacific countries.


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