Tokyo Telemessage seeks protection from creditors

Plagued by a plummeting number of subscribers and intense competition with cellular phone operators, Tokyo Telemessage Inc., a leading pager service, sought court protection from creditors’ claims on its assets Tuesday, company officials said.

The application, filed under the Corporate Rehabilitation Law, was accepted later in the day by the Tokyo District Court.

Tokyo Telemessage is the first to fail among the telecommunications carriers established after the deregulation of the industry in 1985.

The company will continue service with the support of major shareholders, including Tokyo Electric Power Co., while trying to rebuild itself under the rehabilitation law, Tokyo Telemessage officials said. Discontinuation of telecom services requires approval from the Posts and Telecommunications Ministry.

The firm’s liabilities total 25 billion yen, and it is expected to record net losses of 6.9 billion yen for fiscal 1998, according to the company officials.

“Repayment due dates for long-term debts for equipment investment, which totaled 22.3 billion yen, came one after another in the last fiscal year, and it has become extremely difficult for (the firm) to repay (the debts) by itself,” Tokyo Telemessage President Kazuya Yoshida said.

He said the company was forced to step up equipment investment from 1993 through 1996, as pagers caught on with young people.

But subscribers began to jump ship as cell phones gained popularity. Most recent cellular phone models can send text messages as a pager does.

“We couldn’t keep up with the pace of change,” Yoshida said.

After peaking at 1.345 million units in fiscal 1995, the number of the firm’s subscribed pagers fell to 360,000 at the end of April, the Tokyo Telemessage officials said.

The pager industry as a whole has plummeted from a peak of 10.78 million subscribed pagers in August 1996 to 3.53 million at the end of April.

Tokyo Telemessage was established in December 1986 with capital of 2 billion yen, and it began service in the Kanto region in October 1987.