Japan-US Business Report LogoJapan-U.S. Business Report

No. 346, July 1998

Issue Index

Japanese Companies in the US


Japanese businesses and individuals in the United States now have the option of using a transplanted provider of domestic long-distance and transpacific calling services. JAPAN TELECOM CO., LTD.'s New York City subsidiary is charging a flat 30 cents a minute for calls to Japan and 12 cents a minute for calls anywhere in this country. JAPAN TELECOM AMERICA INC. also provides service to most other countries of the world. With its own U.S. facilities, the company plans to wholesale capacity between the United States and Japan and other Asian countries and to add frame relay, ATM (asynchronous transfer mode) and leased-line services for corporate customers. Japan Telecom announced that it would cut the fees it charges American carriers for completing calls in Japan by 25 percent to 15 cents a minute. The Federal Communications Commission made the start of U.S.-Japan service contingent on that change, although Japan Telecom says that it is lowering its interconnection charges for competitive reasons.

On July 1, NTT WORLDWIDE NETWORK CORP. connected its Arcstar frame-relay network with the IBM Global Network frame-relay system operated by INTERNATIONAL BUSINESS MACHINES CORP., thereby providing corporate customers end-to-end data transmission capabilities around the world. The tie-up extends Arcstar's service area to 46 countries from the nine served by NTT Worldwide Network and foreign subsidiaries of NIPPON TELEGRAPH AND TELEPHONE CORP. group members. NTT Worldwide Network and IBM are jointly marketing the service. They also are cooperating on maintenance and billing.

To bring "fiber-to-the-home" technology closer to realization, NIPPON TELEGRAPH AND TELEPHONE CORP. and BELLSOUTH CORP. are pooling their technical knowledge on high-speed optical-fiber network access systems. The specific goal of their R&D collaboration is to drive down the cost of FTTH equipment by developing de facto international standards for the device that allocates optical-fiber signals coming into the home to targeted destinations, such as a television, a PC, a telephone or a LAN (local area network). The broader objective is to make available to homes inexpensive communications services combining video, telephone and data. NTT plans to connect homes in Japan to an optical-fiber network early in the 21st century. It and Atlanta-based BellSouth will propose the outcome of their work to the Full Service Access Network, a group of 14 international communications companies that have teamed up to develop common broadband access system specifications.

The first product resulting from the April alliance between SONY CORP. and MICROSOFT CORP. (see Japan-U.S. Business Report No. 344, May 1998, p. 7) should be ready in 1999. It will be a device to bring video-on-demand, on-line shopping and other two-way services to cable television subscribers. The interactive CATV equipment will combine a set-top box engineered by Sony with Microsoft's Windows CE embedded operating system. The device will be marketed to TELE- COMMUNICATIONS, INC. and other American cable television operators.

SONY CORP. also has tied up with CISCO SYSTEMS, INC. in its quest to be at the forefront of the digital home appliance market. Their work will focus on technology to transmit two-way data flows over CATV networks using faster, higher-capacity coaxial cable rather than the telephone lines now used by cable operators to provide digital services. Drawing on Cisco's Internet Protocol technology, Sony plans to develop a TCP/IP-compliant cable modem that will allow direct connections between PCs and such digital appliances as TVs and audio systems. The new product could hit the U.S. market in 2000.

To expand the North American supply of digital cellular telephones conforming to the CDMA (code-division multiple access) standard, SONY CORP. is producing this product at its Tijuana, Mexico subsidiary for QUALCOMM PERSONAL ELECTRONICS. The joint venture with CDMA licensor QUALCOMM INC. now makes 400,000 cell phones a month at its San Diego, California plant. Sony's Mexican operation adds 50,000 units to that monthly total. QPE's output, which includes PCS (personal communications services) digital mobile phones, is sold under both the Sony and the Qualcomm names.

Osaka's MEGACHIPS CORP., the developer of a digital video transmission system, is projecting initial-year sales of $2 million for its first offshore subsidiary. DIGITAL IMAGE, INC., located in Cupertino, California, is lining up marketing channels for the product. It hopes to tie up with an American company to tailor equipment incorporating its parent's moving-image compression and transmission technologies to U.S. market requirements.

An exchange rate of ¥140=$1.00 was used in this report.

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