Wednesday, October 13, 2004
Another view of how the "Japanese Miracle" happened
Benjamin Kowarsch [benjamin at sunrise-tel.com] lives in Japan but is not "of Japan", which gives him unique standing when he writes:
I read your latest Japan article on your blog.I am uniquely unqualified to comment. Comments from anybody who knows more than I do about recent Japanese tele-history?
You make it sound like NTT wasn't the ugly misbehaving 800 pound gorilla monopolist they are. In fact you are talking about an NTT that you simply won't find in Japan.
But I can see how this happened. No Japanese analyst would lean themselves out of the window as far as making any even slightly negative comment about NTT if they go on record.
The phenomenon of broadband uptake has all to do with renegade samurai and it has absolutely nothing to do whatsoever with any of the institutions or people you mentioned in your article.
Yahoo BB came to the party far too late for Masayoshi Son to lay any claim to having started the revolution. That honour goes to a company called Tokyo Metallic Cable Co, whose bankrupt assets made it possible for Masayoshi to get into the broadband business as late and quickly as he did.
As for NTT, they denied Tokyo Metallic access to their exchanges and Tokyo Metallic had to fight NTT in court for years to force the access that they were by law entitled to get. NTT did all the nasty and dirty things that any 800 pound gorilla in the US would do to keep their position in the market. This nastiness eventually drove Tokyo Metallic into bankruptcy and they had to sell out to Yahoo.
This was a very ugly piece of Japanese business history and there was absolutely none of the harmony and compliance with well meant policies and directives from above you describe in your article. What was really going on over here was a war of atrocities.
If anything, the broadband revolution in Japan was another accident. It was not planned to happen. And certainly the strategy council you mentioned was nothing but a paper tiger, they had zero to do with the progress that Metallic was fighting for. In court. Neither did NTT accidentally act against its own interest. They were forced to. By Court. But not without putting up a fight that led to the bankruptcy of their challenger.
Perhaps one more thing to add ...
In Japan, everything is about pretense "tatemae" and the hidden reality "honne". If the Japanese government really wanted to deregulate the market over here, then why would they not follow through with the Argentinian model they pretended to embark on?
At first, they seemed to be doing the right thing by splitting NTT into two companies, NTT East and NTT West. But then they made sure the two wouldn't get into each other's way. The result: One regional telecom monopoly in the East and another one in the West. No competition between them. Not smart.
The Argentinian example was different. The winner of the Argentinian PTT assets in the North of the country was bound by the terms of the license to rebuild the missing half of the network in the South and compete head on with the winner of the Southern assets. Likewise, the winner in the South was bound to do the same in the North. The result: Two equally strong nation wide telecom companies in Argentina today. Very smart!
The reality is that the Japanese government has no real intention to deregulate. All they are trying to do is not getting entangled into another WTO complaint that they might lose.
I'm afraid to say so, but we will have to continue to rely on renegade samurai for progress over here.
As I wrote in my article, Tokyo Metallic was a minor player that has no hope to be profitable. It was Mr. Son's very aggressive demand for the government that made NTT to concede. NTT can't behave aggressively as ILECs, because half of its stocks are owned by the government.Post a Comment
Nobuo Ikeda, Japan
Nobuo Ikeda, Japan