Japan-US Business Report Logo

No. 354, March 1999

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American Companies in Japan


TELECOMMUNICATIONS

The world's largest ISP, UUNET TECHNOLOGIES, INC., has formed a subsidiary — the first step toward its goal of becoming the top provider of Internet services to corporate Japan. Over the next three years, the Herndon, Virginia firm plans to establish 22 access points around the country. It will link its transpacific backbone with the domestic network being built by parent MCI WORLDCOM, INC.; it also will lease capacity from local communications carriers. By the end of 1999, the UUNET subsidiary expects to have about 100 people on staff, mainly engineers. In moving into the Japanese market, UUNET will be going head-to-head with its hometown neighbor, PSINET INC. (see Japan-U.S. Business Report No. 350, November 1998, p. 27).

American companies doing business in Japan now can take advantage of the convenience of end-to-end, full-channel, transpacific private line service. The connection is provided by AT&T CORP. in conjunction with NTT WORLDWIDE NETWORK CORP. Subscribers to the service just have to deal with one contract, one bill and one point of contact for providing and maintaining the circuit. The charge includes local access in Japan as well as the international full-channel tariff. The service supports data speeds from 56 kilobits per second up to 2.048 megabits per second, with 45- Mbps and 155-Mbps service available on an individual-case basis. NTT-WN is providing the same service to corporate Japan as part of its Arcstar menu.

In its fifth Japan business win, CIENA CORP. has a contract to supply its MultiWave Sentry 4000 dense wavelength division multiplexing product to CROSSWAVE COMMUNICATIONS INC. for its nationwide optical network. The first phase of the project produced revenues of approximately $20 million for the Linthicum, Maryland manufacturer of bandwidth-expanding multiplexers. Six-month-old Crosswave Communications, a partnership among INTERNET INITIATIVE JAPAN INC., SONY CORP. and TOYOTA MOTOR CORP., is building a data-dedicated optical network to meet the growing demand for data communications. Services will begin in April in the Tokyo, Nagoya and Osaka areas and will extend across the country by March 2000. Ciena's MultiWave Sentry 4000 DWDM equipment will give Crosswave Communications a capacity of 100 Gbps at the start of operations.

Within the space of six months, STARGUIDE DIGITAL NETWORKS INC. has received two contracts from OSAKA YUSEN BROADCASTING CO., LTD., Japan's top cable audio operator, for equipment for a first-of-its-kind 2,000-channel satellite/QAM audio distribution network. The Reno, Nevada firm's initial work was on the cable head-end systems for the network. The new contract, worth more than $3 million, covers development of a 40-channel DVB audio receiver system. To be installed at Osaka Yusen's cable head-end stations, these systems will receive audio programming from the United States, Europe and Japan. Completion of the 2,000-channel network is set for the third quarter of 1999. With so many channels available and given the nature of StarGuide's digital technology, Osaka Yusen will have the option of expanding services to include satellite- delivered video programming and Internet access.

In a deal that could generate more than $10 million in revenues over the next two years, ESOFT INC., the Boulder, Colorado developer of the TEAM line of Internet connection products, named NTT ELECTRONICS CORP. as its exclusive distributor in Japan and nonexclusive distributor elsewhere in Asia. eSoft's products are designed to give small businesses an Internet presence. Each unit integrates all the hardware and software necessary to connect a company to the Internet, including a Web server, a domain name server, a firewall and remote-access capabilities.

LUCENT TECHNOLOGIES INC.'s subsidiary has a June shipment date for the PacketStar IP (Internet Protocol) Switch. This intelligent Layer 3/Layer 4 WAN routing switch uses per-flow queuing algorithms to manage data into tens of thousands of dynamic IP packet flows. As a result of this innovation, Lucent says, service providers will be able for the first time to offer bandwidth guarantees, control end-to-end delay and provide multiple tiers of service. They also will be able to offer advanced IP services, such as virtual private networks and voice-over-IP telephony.

Addressing the requirements of fast-expanding corporate intranets, CISCO SYSTEMS, INC.'subsidiary is marketing a new line of high-performance, multilayer switching solutions. The Catalyst 6500 Series and the Catalyst 6000 Series are available in six-slot and nine-slot versions. Both provide support for up to 384 10/100 Ethernet, 192 100FX Fast Ethernet and 130 Gigabit Ethernet ports. Scalable switching bandwidth of up to 256 Gbps is possible with the Catalyst 6500 Series. For customers not requiring that performance, the Catalyst 6000 Series has a scalable backplane bandwidth of 32 Gbps. Typical prices are $34,000 for a six-slot Catalyst 6509 and $29,700 for a nine-slot Catalyst 6009.

Companies looking for connections for file servers, user workgroups, 10- Mbps desktop switches and shared access hubs fit the marketing profile for CABLETRON SYSTEMS INC.'s latest SmartSTACK Fast Ethernet switch. The ELS100-24TXG supports as many as 24 fully managed, wire-speed 10/100Base-TX ports, plus it has two switched Gigabit Ethernet uplinks for connecting the switch to a backbone network. A fully configured SmartSTACK Fast Ethernet switch costs $6,200.

3COM CORP.'s subsidiary is catering to the needs of businesses with less than 500 employees that want local and remote access to data, voice and video at an affordable price. The SuperStack II Remote Access system 1500 combines WAN and LAN connectivity into one box that costs $2,900 for the base module and a four-port I/O card.

Small or branch offices looking for a cost-effective way to integrate data, fax, voice and video traffic over IP or frame relay have a new option in MOTOROLA INC.'s internationally released Vanguard 6425 Multiservice Router. The compact desktop model costs $4,700. That price includes performance-increasing hardware-based encryption rather than the software-based implementation found in competitors' products.

The popularity of personal handyphone system technology may be waning, but so many of these phones exist in Japan that LUCENT TECHNOLOGIES INC.'s subsidiary sees a market for a PHS-compatible version of its ProLogix PBX (private branch exchange) server for small companies. The new product, to be released this fall, will be able to connect with a company's PHS units, whether users are inside the office or in the field, as well as control the internal phones. The ProLogix platform, designed for eight to 500 phone lines, currently costs between $17,100 and $25,600.

POLYMER FLIP CHIP CORP., the driving force behind an innovative technique for forming solderless interconnect bumps for mounting inverted semiconductor chips, signed a nonexclusive technology licensing agreement with NAVITAS CO., LTD. covering the development of smart card and wireless communications devices, including radio-frequency identification products. The Billerica, Massachusetts company and its Osaka prefecture partner, a manufacturer of transfer printing machines, injection molding equipment and laminating equipment, hope to exploit opportunities for smart card and RFID technology throughout Asia. The current agreement does not give Navitas manufacturing rights to the PFC technology, although that is a possibility in the future.

The first wireless prepaid service is in operation in Japan. It is based on BriteDebit, technology developed by BRITE VOICE SYSTEMS, INC. of Heathrow, Florida, and is available as Pre-K to the nearly 800,000 subscribers to TU-KA PHONE KANSAI, INC.'s cellular service in the Osaka region. Customers simply need to maintain money in their accounts via disposable prepaid cards. Brite's longtime partner, MARUBENI CORP., helped to deliver this service to TU-KA Phone Kansai.

QUALCOMM INC., the developer of CDMA digital wireless technology, tentatively has agreed to work with MATSUSHITA ELECTRONIC COMPONENTS CO., LTD. to develop and make the new CRM3000 CDMA radio module. This extremely compact, pretested product will contain all the RF circuitry for CDMA handsets and will interface with the San Diego, California company's MSM3000 chip, thereby enabling communications equipment manufacturers to quickly design and produce CDMA subscriber products, even if they have limited in-house RF experience. Qualcomm sees the module, which should ship in late 1999, as being used not only in cellular handsets but also in smart phones, PDAs, PCs and a number of other products, including data transmission equipment. Matsushita Electronic Components brings to the prospective alliance its expertise in radio circuitry modules.

In a product launch designed to extend the usefulness of its videoconferencing equipment, PICTURETEL CORP.'s subsidiary introduced PictureTel StarCast. This streaming technology enables a videoconferencing system to function like a broadcast center. The video content generated is translated into an IP-multicast stream that any browser-enabled desktop PC on the corporate LAN then can view.

WEBTV NETWORKS INC. hopes that the start of sales of a $470 set-top box by FUJITSU, LTD. will give a shot in the arm to its lagging Japanese service, which allows people to access the Internet via their TV set. The computer maker also is offering WebTV service for $17 a month. It has a 25 percent stake in the subsidiary of WebTV, a MICROSOFT CORP. company.

Another American-affiliated company looking for the right business formula is direct-to-home satellite TV broadcaster DIRECTV JAPAN INC. It has managed to sign up only about 250,000 customers versus the 1 million-plus subscribers to SKYPERFECTV CORP.'s rival service. In an expected ownership and management shake-up (see Japan-U.S. Business Report No. 349, October 1998, p. 28), HUGHES ELECTRONICS CORP., the parent of DIRECTV INTERNATIONAL INC., upped its stake in DirecTV Japan to 42.18 percent from 31.6 percent. It did this by buying shares from video rental chain CULTURE CONVENIENCE CLUB CO., LTD., which previously also owned 31.6 percent of the company but now has a 14.5 percent interest. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. also bought some stock from CCC. In addition, an American executive took over day-to-day management of the company. DirecTV hopes to have 600,000 subscribers by March 2000.

An exchange rate of ¥117=$1.00 was used in this report.aaaaaa

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