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In a move likely to further spur cutthroat competition in the telecommunications industry, KDD and Teleway Japan Corp. signed an agreement Wednesday to merge on Dec. 1.

The merged company will be named KDD Corp., company officials said. The merger was brought on by dynamic change in the telecommunications industry, the prospect of fierce market competition amid mergers of other telecom firms in Japan and abroad, the abolition of foreign capital regulations and the recent reorganization of Nippon Telegraph and Telephone Corp., they said.

KDD, a leading international carrier, and Teleway, a major long-distance carrier, said the new company will launch such projects as next-generation cellular phones, promotion of Internet channels, wireless local telephone networks for business use and mobile telecom systems through satellites.

The merger will create the third largest telecom firm in Japan, with revenues of some 425 billion yen, following NTT and DDI Corp.

KDD Corp.’s annual turnover is expected to reach 445 billion yen on ordinary profits of 20 billion yen for fiscal 1999, ending in March 2000, they said.

For the deal to pay off, KDD Corp. is also expected to streamline the board of directors and workforce. KDD has 5,003 employees while Teleway has 1,240. “With the signing of the merger contract, we will pool our resources and prepare to give full play to the synergy,” KDD President Tadashi Nishimoto told a press conference at a Tokyo hotel Wednesday afternoon.

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