KDDI, SoftBank Corp and Rakuten Mobile added detail to opposition to Japan’s government ending a law covering state-owned NTT, highlighting fair competition, universal service obligations and future foreign investment in the operator as key areas of concern.
The trio suggested a revision of the NTT Law could lead to price increases and decreased competition, stating there is a risk the state-owned operator will no longer have universal service obligations and would have the ability to withdraw services, impacting coverage in rural areas.
There could be “stagnation in the advancement and diversification of services due to a lack of new industry developments”, they noted.
NTT argues the obligation can be integrated into the Telecommunications Business Act.
Its rivals are also concerned NTT could sell the majority of its shares to non-Japanese individuals or foreign governments, potentially compromising the security of the nation’s telecommunications infrastructure.
Protection against non-domestic investment is possible without relying on the existing law, NTT stated: it advocates strengthening ownership regulation through the Foreign Exchange and Foreign Trade Act.
KDDI, SoftBank and Rakuten Mobile were among 180 local organisations expressing opposition to scrapping the law in a submission to various government officials last month.
Marc Einstein, chief analyst at research company ITR, told Mobile World Live the act is almost 40 years old and “should have been updated a long time ago”. Legally the operator cannot move into certain areas, for example bundling mobile and fixed services, he added.
Einstein explained revenue in the telecoms sector is flat at best, with NTT needing to do some major restructuring just to survive in the long term and updating the regulation will make that easier.
In August, the Ministry for Internal Affairs and Communication and the Liberal Democratic Party started work on a plan covering the possible abolition of the NTT act and privatisation.