BT steps up Japan hopes with KDDI deal

Jun 26, 2006

It may be one of the most cut-throat markets in the world for telecommunications providers, but BT is banking on its latest venture with a Japanese carrier to bolster not only its presence in the country, but also globally.

On Monday, Britain's largest telecom group signed a deal with KDDI to form a joint venture with Japan's second-largest telecommunications operator that will manage communication networks for multinational corporations, particularly Japanese companies operating overseas.

Never mind that British mobile giant Vodafone pulled out of Japan less than a year ago as it failed to make headway in the country against rival domestic carriers. BT is upbeat that it can be financially successful in Japan and beyond through its 50-50 partnership with KDDI. About 100 employees are expected to be employed by the newly created company who will be backed by both BT and KDDI, and BT pointed out that the bulk of its operations and resources in Japan will be transferred to the joint venture.

"As the world's second largest corporate market, Japan is high on BT's priority list, and with good reason. Industry reports estimate the size of the current outsourcing market in Japan at approximately $90 billion, twice the size of the rest of Asia Pacific markets combined. Furthermore, the challenges of managing global networking technology, coupled with greater demands on performance, reliability and security, are projected to drive significant growth for network outsourcing," said Andy Green, chief executive of BT global services who was in Tokyo to take part in the signing ceremony to set up a new joint company.

"The joint venture agreement with KDDI is a perfect fit to address this market demand, with BT bringing its global capabilities and proven outsourcing track record, and KDDI contributing local relationships, capabilities and focus on the Japanese market. BT Japan's and BT Infonet Japan's existing customers will be serviced by the JV. In addition, the JV will bring an extended range of service possibilities benefiting companies headquartered in Japan with international operations," Green added.

Key clients are expected to be Japanese companies, particularly manufacturers with overseas operations, such as carmakers with factories in China that can take advantage of an improved communications network between the Tokyo headquarters and local factories. The new company is expected to start operations Aug. 1, and sales by the end of the first year are expected to reach about $43 million (5 billion yen).

Of course, not even Vodafone has retreated from Japan entirely, even though it struggled during its five years trying to do business in the country on its own. Now, though, the world's largest mobile group has decided to stay on in the Japanese market by partnering with Softbank, a local software giant that bought out Vodafone's Japan operations earlier this year. Analysts broadly agree that Vodafone has a better chance this time around by joining forces with a local company that is more in tune with the domestic market, even though Softbank is a new entrant into the telecom market. Similarly, many industry experts expect the tie-up between KDDI and BT to be more successful than if BT were to strike it out on its own. Meanwhile for its part, KDDI made clear that it hopes to benefit from the British carrier's extensive international network.

"A current trend of our customers is to move towards contracting for global solutions to satisfy their network and information technology needs. Harmonizing the resources and know-how of BT's global services with the experience KDDI has built up over many years of providing Japan domestic and international services to our Japan clients will, I am convinced, result in a total global solution that will meet their extremely high expectations," said KDDI Chairman Tadashi Onodera.

Copyright 2006 by United Press International

Explore further: As dust clears, what's next for Sony?

add to favorites email to friend print save as pdf

Related Stories

Myanmar's telecom race enters final stretch

Jun 26, 2013

(AP)—Foreign companies will tap into one of the world's final telecom frontiers Thursday when Myanmar hands out licenses to operate two new mobile phone networks—part of efforts by the long-isolated nation to use technology ...

Myanmar moves to delay foreign telecom deals

Jun 26, 2013

(AP)—Foreign companies hoping to tap into one of the world's final telecom frontiers grappled with lingering political uncertainties Wednesday after Myanmar's lower house of parliament ruled that licenses ...

Apple needs more than iPhone 5: analysts

Sep 13, 2012

Asian mobile carriers look set to cash in on the iPhone 5 and its superfast speeds, but the model is not the game-changer that Apple needs if it is to remain top of the heap, analysts said Thursday.

Recommended for you

As dust clears, what's next for Sony?

2 hours ago

The Sony hacking attack continues to deliver more dramatic plotlines than any fictional movie, but meanwhile the movie studio must move forward and tackle the next steps in minimizing the mess. Will Sony ...

It's down to the wire for online shopping

6 hours ago

As the holiday shopping season winds down, FedEx, UPS and online retailers are using the last few days to try to avoid the problems that occurred last year when severe winter weather and a surge in late orders ...

China's Xiaomi raises more than $1 bn in funding

Dec 21, 2014

China's top smartphone seller Xiaomi Corp. is raising more than $1 billion in a fresh round of funding, a move which would raise its valuation above $45 billion, a report said Sunday.

Why the Sony hack isn't big news in Japan

Dec 20, 2014

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

Dec 20, 2014

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

Dec 20, 2014

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.