Japanese government lifts restrictions on NTT 


The revised restrictions were passed by majority vote in the House of Councillors’ (upper house), after passing through the House of Representatives (lower house) earlier this month 

This week, the Japanese government has passed a law to ease restrictions on Japan’s largest telco NTT (Nippon Telegraph and Telephone Corporation) that were first placed on the company 40 years ago. 

NTT was a government-owned monopoly until it was privatised in 1985, following a long period of rapid economic growth in Japan.  

As part of this process, restrictions were placed on the company to prevent it from dominating the country’s telco market and to enable entrance of new competitors. As per the agreement, the Japanese government would retain ownership of a third of the business, only Japanese nationals would sit on the company’s board, and the company’s fixed-line, mobile, and enterprise businesses would be separated. 

This so-called ‘NTT Law’ has played a major role in creating a reasonably healthy telecoms market in Japan over the past four decades. However, in recent years, NTT has complained that the regulations are holding the company back from becoming a major player on the global stage, particularly due to being forced to disclose the results of its R&D projects due to the company’s partial government ownership. 

Now, the easing of restrictions will mean that NTT will no longer have to disclose its R&D results, a fact the company says will allow them to “become more competitive on a global stage” according to a company press release.  

In addition, NTT will be permitted to allocate seats on its director’s board to foreign nationals (one third of the total members), as well as allowing NTT and its two regional units to change their official business names, if so desired. 

The easing of restrictions has not been received favourably by the wider Japanese telecoms industry. In November last year, rival Japanese firms KDDI, SoftBank, and Rakuten Mobile issued a joint statement expressing their objections to the revision of the NTT Law. The statement expressed that “it is crucial that discussions on the NTT Law be conducted in a manner that avoids any potential harm to Japan’s national interests and its citizens’ lives.” 

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