With e-commerce blooming and cut-throat competition intensifying in the telephone business, Japan Telecom Co. is shifting its focus from voice to data transmission and enlisting the help of foreign partners, says Haruo Murakami, president of the firm.

"More Japanese customers want to outsource management of their corporate network systems and need system solution services," he said. "We are trying to secure profitability by promoting data services."

Japan Telecom, which originated from the former state-run Japanese National Railway group, began offering long-distance calling services on its optical fiber network in 1987, when Murakami entered the company.

Japan Telecom, owned 51 percent by the Japan Railways group, was the first company to complete a nationwide fiber optic network in Japan. Running the full length of the JR railway system, the network allows Japan Telecom to offer communications services in the majority of the nation's most populated areas.

As telecom deregulation progressed into the 1990s, carriers formed alliances to give customers seamless and value-added services and to survive increased competition.

Japan Telecom broadened its scope of business to international calls in 1997, when it merged with International Telecom Japan Inc.

In a bid to beef up its data transmission services, Japan Telecom, which receives about 70 percent of its operating revenue from voice transmission, formed a capital tieup last year with British Telecommunications PLC and AT&T Corp. by allowing them to buy 15 percent stakes in the company.

"BT and AT&T have advanced technology and knowhow on system solutions services, electronic commerce, and security systems for online services," said Murakami.

In its first collaborative effort with the western partners, Japan Telecom will soon offer a high-speed, low-cost international data transmission service that uses an Internet-protocol-based network developed by Concert, a venture established by BT and AT&T, to multinational companies in Japan.

In addition, the carrier will soon begin joint projects with BT and AT&T to develop information technology, he said.

PRISM, a similar IP-based network developed by Japan Telecom, will be connected to Concert's network, he said. Services on PRISM will be offered from April 1.

Another area Japan Telecom has been focusing on is Web hosting services for corporate clients, a move that has forced the company to expand its data center.

However, the debut next year of International Mobile Telecommunications 2000 is expected to turn mobile phones into an effective tool for data transmission.

IMT-2000 is a next-generation mobile phone standard sanctioned by the International Telecommunications Union that allows high-speed transmission of voluminous data such as music and video from anywhere in the world.

Murakami said his company, which owns the J-Phone cellular group, stands a good chance of expanding its market share because it will be making IMT-2000 services available only six months after the NTT group does so.

J-Phone's share of the domestic mobile phone market is 14 percent, while NTT Mobile Communications Network Inc. (NTT DoCoMo) has a hefty 54 percent. An alliance between IDO Corp. and the cellular phone units of DDI Corp. owns 30 percent.

Japan Telecom plans to initiate IMT-2000 service in fall 2001, which will be earlier than most of its other rivals, Murakami said, adding that the group plans to initially invest 500 billion yen to 600 billion yen to build facilities for IMT-2000 services by the end of March 2003.

"It is forecast that 80 million people will be using mobile phones (including car telephones and personal handy phones) by 2003," he said. "If IMT-2000 services are widely accepted, the number of mobile subscribers will increase further."

According to the Posts and Telecommunications Ministry, there were 55.53 million mobile phone subscribers at the end of February.

Although Japan Telecom is steadily expanding into other parts of the business, it appears destined to remain a dwarf among giants.

In October, the three-way merger of long-distance carrier DDI, mobile phone operator IDO and the nation's largest international carrier, KDD, will create the second largest telecommunications group in Japan.

Although nowhere near the size of NTT, which pulled in consolidated operating revenues of 9.73 trillion yen in fiscal 1998, the members of the upcoming group had combined sales of 2.1 trillion yen the same period. Japan Telecom was a distant third, with consolidated revenues of 428 billion yen.

Murakami, however, said he does not believe the DDI-IDO-KDD merger will have a major impact on the industry at the moment, due to the huge costs it will incur covering its bloated work force and extensive facilities.

"Our main target is not the new group, but NTT," he said.

Data transmission services, mobile phones and powerful global alliances are the key ingredients to a telecom company's survival, Murakami said.

"At least we have already taken measures to secure these elements ahead of other carriers," he said.