Japan's ruling party vows to scrap NTT Law by 2025

Japan looks set to scrap its NTT Law despite strong industry opposition. Lawmakers have signalled their determination to abolish the 39-year-old law, which they believe prevents the big telco from becoming a global industry leader.

Communications minister Matsumoto Takeaki has told reporters the government aims to introduce the legislation in the next session of the Diet.

He told a news conference last Friday that the speed of change in the industry meant that "necessary system reforms must be carried out quickly," although he acknowledged the final form of the law was yet to be formulated.

The campaign to scrap the legislation is a power move by the ruling Liberal Democratic Party (LDP), the Ministry of Economy, Trade and Industry (METI) and the NTT Group. 

In opposition has been the rest of the telecom industry, including the other three major telcos and cable TV companies, along with some regional councils and the Ministry for Internal Communications (MIC) itself.

That the MIC boss Matsumoto has publicly announced revisions to the law confirms that the internal debate is over.

Enabling competition

The law was introduced in 1984 ahead of NTT's privatization, aimed at putting limits on the then-monopoly to allow the introduction of competitors while also ensuring universal service and Japanese control. 

The law requires the separation of the fixed-line, enterprise and mobile businesses, and stipulates that the government must hold at least a one-third share in the company.

One of NTT's biggest complaints is the requirement that it make publicly available the results of its research efforts, on the grounds that it is publicly funded. Execs say this has repeatedly prevented it from collaborating with partners.

Another is that the company's 150,000 non–Japanese employees are barred from becoming executives. 

These provisions will certainly be part of the planned reforms, according to former LDP secretary-general Akira Amari, who heads the LDP ‘project team' that has reviewed the law.

Akira said the research provisions should be abolished and the universal service requirements reviewed. He called for the abolition of the law by 2025 at the latest. 

"We need to review these aspects and quickly become a company that meets international standards," he reportedly told website Diamond Online.