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No. 365, February 2000

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Japanese Companies in the US


TELECOMMUNICATIONS

With a near-term investment of some $500 million by FUJITSU, LTD. and its Richardson, Texas fiber-optic transmission and broadband switching platform manufacturing unit, FUJITSU NETWORK COMMUNICATIONS, INC. intends by yearend to double production capacity for its FLASH-192 SONET (synchronous optical network) add/drop multiplexer for interoffice and interexchange carrier networks. By that time, the factory will be able to turn out 1,000 of these optical transport systems a month, or 10 times more than at the start of 1999. The FLASH-192 system operates at 10 gigabits per second, handling the equivalent of more than 129,000 simultaneous telephone calls over a single fiber pair. Production of Fujitsu Network's SONET OC-48 (2.5 Gbps) add/drop multiplexer, FLM 2400 add/drop multiplexer and FLASHWAVE WDM (wavelength-division multiplexing) system also will increase.

Some of the world's most advanced optical networking research will take place at the Photonics Networking Laboratory to be located at FUJITSU NETWORK COMMUNICATIONS, INC.'s campus in Rich-ardson, Texas. FUJITSU, LTD. is moving the applied optical networking research performed at its R&D facility in Kawasaki, Kanagawa prefecture to the United States, narrowing the work done in Japan to basic research. The Texas center will start off with a team of 13 researchers, including eight transferred from Japan. Within five years, though, as many as 100 people could be employed by the Photonics Networking Laboratory, working on high-speed WDM, optical add/drop multiplexing, optical switching, passive optical network and other cutting-edge optical technologies. Sources estimate that Fujitsu could spend $95.2 million on this project through 2004.

With the February 1, 2000 establishment of PACEON CORP. in Duluth, Georgia, MITSUBISHI ELECTRIC CORP. highlighted its intention of becoming a major player in the North American market for advanced optical access systems for corporate and residential use. The new company, formerly the Telecommunications Network Division of MITSUBISHI WIRELESS COMMUNICATIONS, INC., will be in charge of developing and marketing network equipment that complies with the standards crafted by the Full Service Access Network alliance for the convergence of legacy and emerging broadband network services onto ATM-PON (asynchronous transfer mode-passive optical networks) systems. MELCO previewed its interest in this market, which makes use of existing telephone lines to deliver voice, data and video to businesses and homes, by introducing last year the Integrated Full Service Access Platform product line (see Japan-U.S. Business Report No. 358, July 1999, p. 10). PACEON starts off with 50 employees but plans to double in size during the coming year. It is aiming for revenues of $476.2 million in FY 2003.

SUNCALL CORP., which produces a line of fiber-optic connectors under license from LUCENT TECHNOLOGIES INC., established a marketing subsidiary in Greer, South Carolina. The Kyoto prefecture manufacturer envisions the new unit as a way to shorten delivery times and to provide better customer services. Suncall's sales of LC Connectors reportedly are strong. The company also will use the subsidiary to collect information to help it with product development.

At least one cellular phone model to be introduced by MOTOROLA INC. this year will feature an electroluminescence display manufactured by a PIONEER CORP. affiliate. The contract represents the first time that the electronics company has made EL displays for an outsider, although they have been used in Pioneer's car stereo systems. EL displays have several advantages over conventional LCD displays, including a wider viewing angle and reduced power consumption.

The team of OKI DATA CORP. and SHAREMEDIA, INC. has codeveloped a line of Internet appliances that allow users to send e-mail and fax messages anywhere in the world via the Rockville, Maryland partner's Internet Protocol-based Fax2Net service. The devices connect automatically to ShareMedia's global IP backbone, enabling customers to send faxes to a recipient's e-mail address or fax machine as well as to send Web content via fax. The Fax2Net service also provides customers with a virtual e-mail address that allows then to receive e-mail messages via fax. ShareMedia says that its Fax2Net service differs from the competition's in that the communications software and routing equipment reside on the network, not on the appliance.

A company that provides high-speed Internet access and digital communications and e- community services to commercial, lodging and residential facilities has gotten off the ground with financial help from SOFTBANK VENTURE CAPITAL and PEQUOT CAPITAL MANAGEMENT, INC. of Westport, Connecticut. At launch, EVEREST BROADBAND NETWORKS already had agreements with a number of property owners across the country. The enticement for them is that the Fort Lee, New Jersey firm's services help to attract and retain tenants while allowing property managers to retain a share of the revenues from this extra. For apartment residents, for instance, Everest's offerings mean dedicated access to the Internet.

At a cost of $100 million, KDD CORP. acquired capacity on GLOBAL CROSSING LTD.'s round-the-world fiber-optic network to connect customers in Asia, the United States, Latin America and Europe. Initially, the big Japanese international carrier will use recently completed Pacific Crossing-1, which links the United States and Japan (see Japan-U.S. Business Report No. 364, January 2000, p. 10).

With almost predictable regularity, INTERNET INITIATIVE JAPAN INC. announces another upgrade of its transpacific backbone in a race to keep pace with the booming volume of Internet traffic between Japan and the rest of the Asian Pacific region and the United States. The latest expansion, which was to be operational in the middle of February, boosted capacity to 775 megabits per second from 620 Mbps. It was achieved by adding a 155-Mbps line between Tokyo and Palo Alto, California. IIJ's first dedicated Japan-U.S. line, put in service in March 1994, had a capacity of 192 kilobits per second.

People who use TOKYO TELECOMMUNICATIONS NETWORK CO., INC.'s Internet service now have dial-up access around the world, thanks to a roaming agreement with Herndon, Virginia-based UUNET TECHNOLOGIES, INC., the world's biggest Internet services provider. They have access to 1,113 points in 25 countries outside Japan, plus 85 in Japan in addition to the 15 Internet access points that TTNet maintains in the Tokyo metropolitan area. Subscribers who take advantage of this new freedom pay roaming fees as well as telephone connection charges.

By the end of 2000, JAPAN TELECOM CO., LTD. will pull out of the communications market in the United States and in the United Kingdom. This pending move follows the purchase last fall of a combined 30 percent stake in the long-distance carrier by AT&T CORP. and BRITISH TELECOMMUNICATIONS PLC and the January launch of their branded Concert international services for multinationals. New York City-based JAPAN TELECOM AMERICA, INC. began facilities-based domestic long-distance and transpacific calling services in June 1998. It will sell off or otherwise dispose of its equipment. In the future, the subsidiary will backstop the provision of Concert services to Japanese companies operating in the United States. Japan Telecom America also will sell the 51 percent stake in AIRNEX COMMUNICATIONS INC. that it acquired in August 1998. This San Ramon, California long-dis-tance carrier serves a largely Japanese clientele.

Given the still sky-high cost of digital TV sets, FUNAI ELECTRIC CO., LTD. and SARNOFF CORP. have decided to come up with a popularly priced set-top box that will convert terrestrial DTV broadcast signals for display on today's analog sets. This device will give consumers access not only to digital programming but also to the picture quality and the CD-like surround sound that are available with digital delivery. Princeton, New Jersey- based Sarnoff will develop a customized graphical user interface and a reference design for the STB, which will incorporate demodulator and video decoder chips that MOTOROLA INC. designed in cooperation with Sarnoff. Consumer electronics manufacturer Funai Electric will build the STBs. They are expected to be available in the fourth quarter of 2000.

An exchange rate of ¥105=$1.00 was used in this report.aaaaaa

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