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Reports: Japan Warns Telephone Co.

March 29, 2001

TOKYO (AP) _ The government will propose breaking up Japan’s largest telephone company if it refuses to promote competition and keeps national calling costs high, newspapers reported Thursday.

The warning to Nippon Telegraph and Telephone Corp. was to be included in a government plan to be revealed later Thursday, aimed at putting Japan on equal standing with the United States in Internet use, the Nihon Keizai financial daily reported, without citing sources.

The government would consider breaking up NTT in the fall of 2003 if the company remains intransigent, the paper said.

It will also ask NTT to reduce its stake in major subsidiaries such as mobile carrier NTT DoCoMo to reduce its dominance over the communications market, the nationwide Yomiuri newspaper said.

Should the company fail to do so, the Ministry of Posts and Telecommunications will bar the company from expanding into new sectors, the newspaper said.

Japan’s high telecommunications costs have long been a point of contention in trade talks between Washington and Tokyo.

Washington has said Internet access fees are several times those in the United States and pose a barrier against companies trying to break into the Japanese market.

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