Duo to Face Off With NTT
Internet Initiative Japan and Tokyo Electric Power Co. look to grab some data communications market share from NTT
July 25, 2002
TOKYO -- Japan’s data communications market faces its first major shakeup in a decade, after Internet Initiative Japan Inc. (IIJ) (Nasdaq: IIJI) announced last week that it was talking to utility Tokyo Electric Power Co. (Tepco) and its PoweredCom Inc. and Tokyo Telecommunication Network Co. Inc. (TTNet) subsidiaries about integrating their trunk data businesses.
Local media immediately framed the talk as a potential combination of players that could take on the Japanese market’s Godzilla. Otherwise known as NTT Group (NYSE: NTT), the monster has something like a 50 percent share of Japan’s ¥1.5 trillion (US$12.8 billion) enterprise data communications market. According to this scenario, the team would meld the more entrepreneurial IIJ -- which helped create Japan’s modern data communications market by bringing the Internet to enterprises -- and staid old utility Tepco to take on NTT and deliver new services and lower prices.
”If our merger plans materialize, I'm sure we'll be able to take a share matching that of NTT in the [data communications] market,” IIJ President Koichi Suzuki told a press conference Thursday.
Initial reaction to the news by analysts was positive, but the protagonists have since gone strangely quiet.