A government advisory panel is to call for the conditional dismantling of the current holding company structure of Nippon Telegraph and Telephone Corp., according to a final report the panel is scheduled to release on Dec. 21.

In the report, a copy of which has been obtained by Kyodo News, the Telecommunications Council recommends that NTT submits a business plan that spurs competition. It says the holding company should be scrapped if the plan is not drawn up or its contents are unsatisfactory.

The report by the council, which advises the posts and telecommunications minister, also urges the government to show strong commitment to deregulating the telecom market by setting a deadline of "roughly two years" to check whether sufficiently competitive market conditions have been created.

In a related development, the same panel in a report directly to the prime minister will recommend Tuesday that the NTT holding company structure be scrapped so that group companies may compete against each other without being bound by holding company limitations, according to the panel's report, also obtained by Kyodo News.

The Telecommunications Council's report says that if competition remains insufficient after the two-year period, the government should demolish the NTT holding company set-up.

The contents of the report were approved at a meeting of the council's subcommittee members held Friday ahead of the official release of the report.

The Ministry of Posts and Telecommunications will draw up an amendment to the law governing the operation of NTT with an eye to submitting the amendment to the Diet session that will convene in January, officials said.

The ministry will have NTT submit the competition plan by next fall.

The report says the plan should include measures that would enable its group firms to compete among themselves through such means as a cut in the equity stake held by the holding company in NTT DoCoMo Inc., the powerful mobile phone unit that runs the popular i-mode Internet service on cellular phones.

The report further recommends that NTT surrender its control of local phone networks, which blocks rivals from directly accessing customers to offer Internet and other telecom services.

It also proposes that NTT substantiate these deregulatory steps by adding concrete timetables and details of the related competition programs into the plan it would submit to the ministry by next fall.

In addition to these recommendations, the report urges the government to monitor NTT's compliance with the plan.