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NTT's Vision Towards Realization of Hikari-no-Michi

On November 24, at the Democratic Party of Japan’s Information and Telecommunications Diet Members Federation hearing, NTT explained its perspective towards the realization of the “Hikari-no-Michi” vision.

Realization of ”Hikari-no-Michi”(PDF;3.6MB Another window opens.)

[Main Points]

The expanded use of broadband will be achieved using both mobile and fixed networks.  In particular, in Japan, where mobile broadband is very advanced, making mobile broadband even more convenient is a key towards realization of the “Hikari-no-Michi.”
To further increase broadband adoption rates, it is necessary to promote ICT use in education, medicine and government services.  We should work towards accelerating the use of ICT through strong government leadership in order to realize sustained economic growth and resolve socioeconomic issues, such as the aging of society and declining birth rate, and environmental issues.
NTT intends to continue contributing to information and telecommunications in Japan through its efforts to provide support for ICT use in the fields of government services, education and medicine, and, in order to eliminate the digital divide, to continue working to expand the coverage area for optical services and provide user-friendly and inexpensive services.
For Japan to achieve strong growth in the global age, from the perspectives of user-friendliness, global competitiveness, and innovation and investment incentive, the information and telecommunications market must move towards, in-principle, deregulation and where necessary, ex-post regulation.

[Overview of Explanation]

Realizing the “Hikari-no-Michi” (Mobile and Fixed) Through ICT Use and Facility-based Competition

In Japan, where both mobile and fixed broadband, especially mobile,  are very advanced, making mobile broadband even more convenient is a key towards realization of the “Hikari-no-Michi.”  The entire NTT Group will support the promotion of mobile broadband use.  Current discussions regarding expanded use of broadband focus too heavily on fiber-optics.  Considering global trends, we believe that the expansion of broadband use will be realized through both mobile and fixed networks.

Employing wireless technology to enable the use of “ubiquitous” broadband is the core focus of the “Hikari-no-Michi” vision.  There are currently 120 million mobile phone users—virtually the entire population of Japan is capable of using mobile broadband.  What is required next is to achieve ultra high-speed transmission on par with optical fiber.  While NTT has taken the initiative to work towards achieving ultra high-speed transmission ahead of its competitors, to realize this goal, the environment for the efficient usage of frequencies needs to be improved.

The expansion of broadband (both mobile and fixed) has been enhanced as a result of stiff facility- based  competition among carriers.  Currently, 90% of the population uses mobile broadband, and 70% of households use fixed broadband, placing Japan’s broadband environment at the world’s leading level in both mobile and fixed broadband.

To further increase broadband adoption rates, it is necessary to promote ICT use in education, medicine and government services.  We should work towards accelerating the use of ICT through strong government leadership in order to realize sustained economic growth and resolve socioeconomic issues, such as the aging of society and declining birth rate, and environmental issues.  NTT Group will contribute its full efforts to achieve these goals.

Past Initiatives Taken by NTT Group

In providing its world-leading broadband services, NTT Group has been, and will continue to be, an industry leader.  NTT’s total capital investment for mobile and fixed broadband has exceeded 8 trillion yen, and over the past 10 years, NTT East and NTT West have reduced costs by 2 trillion yen, reducing optical fiber costs by approximately 75% and fiber-optic service charges by approximately 50%.  NTT Group will continue to work towards providing user-friendly and inexpensive services.

With respect to FTTH and copper access networks, NTT Group has made its networks the most open in the world, creating an environment for fair and appropreate use of equipment and facilities.  Further, Japan is the only country in which fiber-optics are openly leased to competing carriers.  While there was an incident of improper use of information by NTT West, after a stiff sanction was imposed, firewalls were strengthened and completed to ensure an environment where equipment and facilities can be used in a fair and proper manner.

Also, NTT Group is directing its efforts to enhance and expand broadband services.  This includes Internet connections using a diverse array of devices, video services via mobile phones and TVs, information providing services, as well as customer support for setting up a variety of information devices at home and technical support in response to breakdowns.

With a view towards eliminating the digital divide, in addition to expanding its broadband coverage area at its own expense, NTT is also working to provide broadband services to unprofitable areas through a publicly-structured and privately-operated method.  The digital divide is not limited to rural areas, but exists in urban areas as well.  In response to the many cases where ducts in multi-unit dwellings were too narrow for optical cables, NTT developed thin low-friction cables through its efforts in research and development and NTT also improved construction and installation techniques.

Japan frequently experiences natural disasters, such as earthquakes and typhoons.  In the event of a natural disaster, NTT sends employees from across the nation to the disaster site, provides temporary mobile phones, installs temporary public phones, repairs damaged telephone poles and replaces cabling as necessary, in order to quickly restore the information and telecommunications infrastructure.  Outside of responding to disasters, a large number of roads are widened and bridges are replaced every year across the nation, and on such occasions, NTT relocates telephone poles and replaces cables.  The telecommunications infrastructure is the central nervous system of Japan, and we continue to monitor it without fail, 24 hours a day, 365 days a year.  Even in the heavy snows of the snowy regions and at the top of mountaintop steel towers, NTT Group employees silently, but steadily perform maintenance, and we consider such maintenance to be extremely important.  This type of infrastructure maintenance requires a consistent supply of people, equipment and money.

In the hopes of utilizing the world-leading broadband environment that NTT Group has expanded and maintained, NTT Group as a whole is supporting ICT use in government services by the national and local governments, and in education and medicine.  In addition, in order to apply the ideas of venture companies to ICT use, NTT Group is focusing on supporting the formation of new businesses.

NTT Group's Initiatives Going Forward for Realization of the “Hikari-no-Michi”

NTT Group would like to especially support the use of ICT in the fields of education and medicine/health, for the benefit of the generations that will support Japan in the future.  We would like to collaborate with elementary and junior high schools across the nation, and with the cooperation of textbook companies and user terminal manufacturers, promote trials for greater ICT use in education.  We will also increase the educational discount to schools for fiber-optic service and expand the service menus available.

NTT is carrying out research and development directed at expanding the coverage area of fiber-optic service in order to eliminate the regional digital divide.  Currently, service is available within a 7 kilometer radius from a telephone station, and NTT is engaged in research and development to extend this range to over 20 kilometers from a telephone station, through the upgrade of station devices.  If this is accomplished, it will allow the coverage range to extend to areas adjacent to current coverage areas.  We would also like to provide fiber-optic services to core facilities, such as schools, community centers and hospitals, of those regional communities.

Achieving ultra high-speed transmission for mobile phones and smartphones, which already have 120 million users, is the key to realizing the “Hikari-no-Michi.”  The current global trend is the increased use of broadband on mobile phones.  Next month, NTT DOCOMO will launch an ultra high-speed service that is on par with optical fiber.  The initial transmission speed will be 75 Mbps, but by 2014, when the expanded use of frequency is realized, services at the speed of 100 Mbps  will be available.  While there are associated risks, we are taking on the challenge of commercializing this service about 2 years ahead of our competitors.  In addition, this service will be supplemented by the expansion of public wireless LAN in inner-city areas, underground and subways.

Policy Proposals for Realization of the “Hikari-no-Michi”

In order to realize the “Hikari-no-Michi,” should we adopt the “Galapagos Plan,” a rarely utilized approach worldwide, where a fiber-optic only company is created and the fiber-optic services are mandated  for all households, or the “Global Standard Plan,” where users have the freedom of choice between mobile and/or fixed services, and where companies, such as CATV, engage in facility-based competition?  It goes without saying, we will work towards the realization of “Hikari-no-Michi” through ICT use and facility-based competition by maximizing the potential of mobile and fixed broadband.  In particular, we believe mobile broadband is the key. 

According to NTT Group’s policy proposal, the information and telecommunications market is undergoing a large paradigm shift from the age of telephone to the age of IP, namely, shift towards broadband, mobile and globalization. The market is undergoing a large shift from phones to a market of contents and application services. In terms of market players, previously, the competition had taken place among domestic carriers. Now, hardware and software vendors such as Google, Apple and Samsung are the main players and are sweeping over the global information and telecommunications market. We kindly request that the government implement a strategy that would enable Japan and Japanese companies to grow robustly in this global age. We believe that a move to, in principle, deregulation and where necessary, ex-post regulation is necessary based on the following three perspectives.

User-friendliness. During the telephone era, it was said that NTT alone could provide all services and asymmetrical regulations were effective with respect to NTT. In the IP/broadband era, however, NTT only can no longer serve as a one-stop provider of all services. It is time to re-examine the asymmetrical regulations imposed on NTT.
Global Competitiveness. In conjunction with the global development of both individual and corporate activities, the markets and its players are also becoming globalized. The market should be looked at from a global perspective and should not be limited to just the domestic market.
Innovation and investment incentive. Technical innovation and changes in business models occur at a rapid pace.  10 years ago, few people were able to predict the success of the current Internet and Web 2.0.  The central focus of this policy should be to improve the environment so that it allows free creation of individual business models and securing investment incentives.

NTT Group will continue to provide a world-leading broadband and ubiquitous environment and safe, secure and convenient services, and hopes to continue to serve as a company always trusted by its customers. Under the same slogan that NTT proclaimed when we set out our “Hikari” vision six years ago, we will continue to direct our efforts to the advancement of Japan’s information and telecommunications platforms.

[Questions and Answers]

What are your thoughts regarding future prices of fiber-optic services?
From the time that NTT, ahead of all other companies across the globe, committed ourselves to the penetration of fiber-optics, we had the goal of setting the prices of fiber-optic services at the comparable levels to ADSL services, and have directed our efforts towards reaching that goal. Unfortunately, at this point in time, we have not been able to reduce costs to that extent, but hope to do so as soon as possible.

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