Japan’s NTT is establishing new foothold in the US

Japan’s NTT is establishing new foothold in the US
Nippon Telegraph and Telephone, the parent of Japan’s largest mobile carrier, NTT DoCoMo, and the world’s largest telephone company by revenue has been baring the burden of some ill-fated overseas investments over the years.

Most recently, the company announced it was divesting its stake in Indian carrier, Tata DoCoMo, of which NTT owned about 26% as the result of an initial investment of over $2.5 billion. Given the poor financial performance of Tata DoCoMo, it was not expected that NTT would recoup its investment.

NTT has been a player in the United States in the past, having invested in AT&T Wireless during the pre-Cingular days. The company ultimately sold its initial multi-billion dollar investment, taking a loss in the process, in 2002. Given AT&T’s performance of late, and 20/20 hindsight, it would have been better for the company to have held that stake a little while longer.

The company is looking to reverse its fortunes and has been investing in hard infrastructure in the US, particularly in Silicon Valley, where NTT is opening a new research center and showroom, hiring local talent from the competition to pump life into the venture. With nearly 90% of its revenues coming from Japan, NTT has to regroup as it reaches out internationally because the Japanese market has been in a very stagnant growth pattern for the better part of 20 years.

Its initial investments are more IT based, to capitalize on its Tier 1 internet backbone which has parity with the likes of AT&T, Sprint, and Verizon. From there, whatever direction NTT takes, it will take time, “NTT is a very big ship – it takes a long time for it to change course,” according to a fund manager who owns NTT stock.

Eventually making a play into wireless makes sense, because mobile is the future (and present). However, given NTT’s past experience with major mergers and acquisitions, it is a virtual guarantee the company will not be making any major plays, such as bids for companies like T-Mobile. “We paid a high tuition for lessons on M&A,” NTT board member Tsunehisa Okuno.

source: The Wall Street Journal

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8 Comments

1. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

Maybe NTT can buy Cyanogenmod.

2. smallworld

Posts: 517; Member since: Jul 13, 2012

??? Why?

5. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

Because NTT has a strong history of research and development, is not tied to a particular phone OS, and could nurture the further development of CM. Also because NTT does not have a strong impetus to "do bad things" to the phone market whereas monopolistic companies like Microsoft and Amazon do.

7. Maxwell.R

Posts: 218; Member since: Sep 20, 2012

That is an odd observation given that NTT is 33% owned by the Japanese government, and is *the* phone company in Japan, and owns the last mile pretty much everywhere. That is a monopoly. Amazon is nothing like a monopoly. NTT has nearly 1,000 subsidiaries. Cyanogenmod would get crushed by the bureaucracy and inaction.

8. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

NTT has what monopoly power in the US? None. Amazon has near monopoly power in books and ebooks and a mindset of "monopoly or bust". This has been in the news quite a bit over the past few years. As the article mentions, NTT just established a new research center. Doing some good work on Cyanogen might be a great halo project for this research center. There's all sorts of cool things that could be done with Cyanogen in a research environment, creating upsides and opportunities for many communities and stakeholders. This 1,000 subsidiaries thing you bring up is just a bogus strawman. The chance of a US research center working on Cyanogen interacting with any substantial number of these subsidiaries is very low.

3. parthoman

Posts: 80; Member since: Aug 18, 2014

nice thought .

4. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Or, T-Mo? A DoCo-Mo would be a good fit and would probably pass regulatory muster.

6. Omarc07

Posts: 574; Member since: Nov 12, 2012

i want them sharp Japanese phones with all them cool feature s here in the US.

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