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No. 360, September 1999

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Japanese Companies in the US


TELECOMMUNICATIONS

Japanese multinationals doing business in the United States will have the choice of two more hometown communications carriers in 2000, particularly for their transpacific data communications requirements. The Federal Communications Commission awarded facilities-based operating licenses to DDI COMMUNICATIONS AMERICA CORP., the Los Angeles subsidiary of domestic long-distance carrier DDI CORP. (see Japan-U.S. Business Report No. 355, April 1999, p. 9), and to TTNET AMERICA, INC., the recently formed L.A. unit of TOKYO TELECOMMUNICATION NETWORK CO., INC. (see Japan-U.S. Business Report No. 357, June 1999, p. 11), which got its start by providing local phone service in the Tokyo area. Both companies have secured capacity on separate Japan-U.S. undersea fiber-optic networks that currently are being built. DDI Communications hopes to be operational next spring, while TTNet America is eyeing a third-quarter start-up.

Printed circuit board computer-aided design and manufacturing systems developer ZUKEN INC. invested $1 million in HOLONTECH CORP., acquiring a 2.5 percent or so stake in the San Jose, California specialist in data communications equipment and software. NEC CORP. formed the company in August 1996 from part of its U.S. operations. HolonTech is particularly strong in switch-based load-balancer products and related flow-control software for managing traffic to Web and application servers. This is an area of interest to Zuken, which is looking for a big increase in its network- related business.

DDI CORP. and KYOCERA CORP. are prepared to inject as much as $44.3 million into IRIDIUM LLC, the global satellite phone and paging operator that filed for bankruptcy protection in August after failing to sign up enough customers. NIPPON IRIDIUM CORP. owns 11.2 percent of the Washington, D.C.-based company, second only to MOTOROLA INC.'s share. In turn, DDI and its affiliates have a 50.5 percent stake in Nippon Iridium, while Kyocera owns 10 percent of the company. Symptomatic of Iridium's troubles, Nippon Iridium has attracted fewer than 3,000 subscribers in Japan, about 30 percent of its start-up projection. Service has continued while Motorola tries to negotiate a financial reorganization plan for Iridium.

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