Japan's cellular phone market opening to freer competition
Japan's cellular phone market opening to freer competition
TOKYO (AFP): A free-for-all is shaping up in Japan's cellular phone market with further deregulation of the fast-growing industry coming into effect yesterday, industry sources said.
Japanese cellular phone users, who have previously been forced to use receivers leased from carriers, will now be allowed to buy their own sets. At the same time, two new companies -- TU-KA Cellular Tokyo Inc. and Tokyo Digital Phone Co. -- will join the two existing operators in the lucrative Tokyo metropolitan area.
On July 1, the market will be further opened with consumer electronics makers allowed to join the cellular phone operators in selling equipment.
The posts and telecommunications ministry decided in December 1992 to introduce the new system under U.S. pressure stemming from a bilateral agreement in 1989 to open the market to foreign competition, a business consultant said.
On March 12, Japan and the United States reached a final agreement whereby Nippon Idou Tsushin Corp. (IDO) will build within 18 months 159 new relay stations for cellular phones using the system adopted by the U.S. maker Motorola Inc.
Latent demand for cellular phones is "enormous", said Koji Oboshi, president of NTT Mobile Communications Network Inc., the nationwide cellular phone operator. "We expect a 50-percent growth in our users in 1994."
Kentaro Fujimoto, a consultant at the Nomura Research Institute, predicted the number of cellular phones users would jump around 35 percent this year to 2.7 million.
Oboshi said only 1.6 percent of Japan's population now use cellular phones, compared with 5.5 percent in the United States and 9.8 percent in Sweden.
"Assuming that the ratio for Japan will grow to as high as that of Sweden in the near future, it would mean there will be more than 10 million users in Japan," Oboshi said.
Japan's cellular phone service started in December 1979 with the then state-run Nippon Telegraph and Telephone Corp. (NTT) operating in Tokyo. NTT has since expanded its service nationwide.
After NTT came under private ownership in the first round of deregulation, two carriers joined the market in 1987 with IDO serving the Tokyo-Nagoya industrial belt and the Cellular Group the rest of Japan.