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

No. 348, September 1998

Issue Index

Japanese Companies in the US


In a major expansion of its business in Japan, PSINET INC., the largest independent commercial Internet service provider, bought two domestic ISPs in the space of a few weeks. First, it acquired RIMNET CORP. for an undisclosed price. One of the country's biggest ISPs, Rimnet offers domestic and international Internet telephony, international Internet faxing and a variety of application-development services to roughly 70,000 dial-up customers and some businesses. It had revenues estimated at $15.2 million in the year through August 1997. PSINet then acquired TWICS CO., LTD., one of Japan's original ISPs. It primarily serves the SOHO market. Both purchases complement the operations of the Herndon, Virginia company's subsidiary, which has catered exclusively to corporate customers. Rimnet and TWICS subscribers now have access to PSINet's full range of services, including Internet faxing and voice, electronic commerce, security services, Web hosting and multimedia, global roaming for remote access, and intranet/extranet services. PSINet's frame relay- based, Internet Protocol-optimized network connects more than 400 points of presence in 12 countries.

ICON-TELEWAY INTERNET CORP., a company formed last November by Weehawken, New Jersey-based ICON CMT CORP. (48 percent) and TELEWAY JAPAN CORP. (52 percent), has completed an Internet data center in Tokyo and connected an Internet backbone based on Teleway Japan's high-speed, nationwide ATM backbone with Icon CMT's nationwide American backbone. ITIC now is marketing its comprehensive Internet, intranet and extranet services to corporate clients. It currently has 35 professionals on staff but expects to expand to more than 200 people over the next two years. ITIC will become an affiliate of KOKUSAI DENSHIN DENWA CO., LTD. December 1 when Teleway Japan merges with Japan's largest international communications provider.

The launch of nationwide CDMA digital cellular services under the cdmaOne name by DDI CORP. and the pending rollout by NIPPON IDOU TSUSHIN CORP. (see Japan-U.S. Business Report No. 347, August 1998, p. 26) are providing additional sales opportunities for American vendors. Both wireless network operators have selected DSC COMMUNICATIONS CORP.'s INfusion Home Location Register as the external data base for their cdmaOne services. The Plano, Texas company's scalable IS-41 HLR system will allow DDI and IDO to manage their wireless subscribers, support roaming and mobility management, and add new revenue- generating services. Deliveries of INfusion HLR have started to both companies. DDI already uses this application with its personal handyphone system service.

With the start of cdmaOne services, KYOCERA CORP. and other Japanese manufacturers of handsets have begun shipping products to the two carriers. These handsets employ CDMA chipsets from DSP COMMUNICATIONS, INC. The Cupertino, California developer's chipsets, which deliver an IS-95-compliant solution for complete baseband processing, provide clearer voice quality to customers as well as longer standby and talk times because of their low power consumption.

The nearly 20 million subscribers to NTT MOBILE COMMUNICATIONS NETWORK, INC.'s cellular services soon could have access to an advanced personal navigation system. That service will be based on client-server wireless location determination technology that SNAPTRACK, INC. licensed to NTT DoCoMo. The San Jose, California company's technology combines the GPS (global positioning system) navigation system with a wireless communications infrastructure to deliver accurate, cost- effective location information. NTT DoCoMo will be the first carrier to commercialize SnapTrack's know-how.

Looking down the road to the time when the wideband-CDMA format could become the standard for wireless communications, AIRTOUCH COMMUNICATIONS INC. is talking to JAPAN TELECOM CO., LTD. and NISSAN MOTOR CO., LTD. about forming a company to offer W-CDMA mobile phone service. If the trio decides to go ahead, the new venture will engage in feasibility studies for the time being. San Francisco-based AirTouch Communications has small minority interests in six of the nine Digital TU-KA Group cellular services providers in Japan. Japan Telecom and Nissan also are investors in those companies. In addition, the American company and Japan Telecom own parts of the three Digital Phone Group carriers serving Tokyo, Osaka and Nagoya.

PACIFIC GATEWAY EXCHANGE INC., a facilities-based international communications carrier, has opened a subsidiary in Tokyo and applied to the Ministry of Posts and Telecommunications for a license to own and operate its own fiber-optic cable network in Japan. Once the Burlingame, California company receives a Type I license and builds a network, it will wholesale international capacity to local communications companies with Type II licenses. Until recently, KOKUSAI DENSHIN DENWA CO., LTD. had a minority interest in PGE (see Japan-U.S. Business Report No. 347, August 1998, p. 8).

What is said to be the fastest switch in the industry has been released by FORE SYSTEMS INC.'s subsidiary. The ForeRunner ASX-4000 is the first in a new family of ATM switches from the Warrendale, Pennsylvania manufacturer that can scale to more than 100 gigabits per second. In another first, the switch, which provides up to 40 Gbps of nonblocking switching capacity, supports OC-48c ATM ports, each of which delivers a 2.4-Gbps connection. Fore expects to sell 20 of the ForeRunner ASX-4000s in the first year of marketing for use as the backbone of large enterprise and high-performance desktop networks or for deployment by ISPs. A fully configured system with 16 OC-48c ATM ports is priced at $193,100.

Japan newcomer NBASE SWITCH COMMUNICATIONS tapped RIKEI CORP. to be the exclusive distributor of its Gigabit Ethernet switch. The GFS 3012 GigaFrame switch features as many as 12 switched Gigabit Ethernet ports and a sustained filtering and forwarding rate of up to 5.5 million packets per second regardless of load or packet type. The Chatsworth, California supplier's product also supports up to 64 ports in any combination of Ethernet, Fast Ethernet or Gigabit Ethernet. Rikei is marketing the NBase GFS 3012 as a backbone switch and as a Gigabit Ethernet desktop switch for mission-critical applications.

The BayStack 450 Switches are the latest addition to that line from BAY NETWORKS, INC.'s subsidiary. Available in either a 12-port or a 24-port configuration, each BayStack 450 has an adapter slot for Gigabit Ethernet, Fast Ethernet or 10/100-autosensing Ethernet ports. Up to eight units can be stacked together for a total of 224 ports. In the event that one switch fails, the Bay-Stack 450's fail-safe cascade stacking architecture ensures that the other switches remain operational. The 12-port model costs $3,500, while the 24-port model lists for $5,200.

The industry's fastest Ethernet interface card is how CISCO SYSTEMS, INC. describes the WS-X5410. Designed for the company's mainstay Catalyst 5000 and 5500 switches, the card costs $27,500.

A localized version of the 3Com Megahertz 10/100 LAN+56K Modem PC Card has been released by 3COM CORP.'s subsidiary. As the name suggests, the $205 card gives portable computer users connections to their companies' Ethernet or Fast Ethernet networks while providing downloads at speeds of up to 56 kilobits per second.

Computer telephony platform supplier ALTIGEN COMMUNICATIONS, INC. is working with NITSUKO CORP. to adapt its AltiServ system to the Japanese market. This system combines the benefits of traditional PBXs (private branch exchanges) with the advantages of computer telephony integration for such functions as automated-attendant service, voice messaging, automatic call distribution and electronic mail. AltiServ is designed for small to midsized businesses that have up to 100 phones and call centers. Development work is expected to be completed by the end of the year, with shipments starting during the first quarter of 1999. SUMISHO ELECTRONICS CO., LTD. will cooperate with Nitsuko and AltiGen in sales and marketing of turnkey AltiServ systems, which are likely to be priced between $15,000 and $22,000. To cement these new relationships, communications equipment manufacturer Nitsuko and three Sumitomo Group companies invested a total of $1.5 million in Fremont, California- based AltiGen.

The growth of the CTI market in Japan persuaded ASPECT TELECOMMUNICATIONS CORP., a provider of integrated call-center solutions, to open a wholly owned subsidiary in Tokyo. The San Jose, California firm already has lined up its first fully integrated call-center customer, BELLSYSTEM24, INC., one of the largest Japanese telemarketing and call-center outsourcing companies. Aspect's subsidiary is responsible for recruiting other customers for its automatic call distributors, CTI solutions, call-center management and reporting software, and automation solutions as well as for providing consulting and systems integration services and round-the-clock support.

The world leader in videoconferencing systems, PICTURETEL CORP., has released in Japan a high-performance system for such demanding applications as telemedicine, distance learning and executive conferences. The System 4000ZX, which is part of the Concorde 4500 line of group videoconferencing products, gives users the flexibility to create customized videoconferencing applications. The product also incorporates the Andover, Massachusetts manufacturer's PT716plus technology for optimal audio performance at lower transmission rates. PictureTel's subsidiary priced the standard configuration of the System 4000ZX at $31,000.

An exchange rate of ¥145=$1.00 was used in this report.

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