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The communications ministry said Friday it will order NTT West Corp. to improve its business practices following a massive leak of confidential customer data to sales agents in violation of the law.

The ministry said an employee of NTT West-Hyogo Corp., a subsidiary of the regional telecom company, leaked more than 350,000 sets of data on subscribers to NTT West’s and competing carriers’ asymmetric digital subscriber line services between last August and October.

The order will be issued following a hearing by the Internal Affairs and Communications Ministry with NTT West.

The ministry also found 900 similar disclosures in Ishikawa Prefecture made by NTT West-Hokuriku Corp., another subsidiary based in the prefecture, between March 2008 and last November.

The order could presage a further regulatory clampdown on Japan’s dominant telecom firm.

“Although similar problems have not been detected at NTT East Corp., a structural problem similar to that of NTT West Corp. exists,” communications minister Kazuhiro Haraguchi said.

The business improvement order is the first of its kind for a unit of Nippon Telegraph and Telephone Corp.

NTT West earlier acknowledged that customer data provided to its sales agents included the names of multiunit dwellings that have access to its ADSL services and those of other carriers, as well as the room numbers of subscribers.

A man working at NTT West-Hyogo Corp. was initially found in November to have disclosed confidential information on 350,000 subscribers between last August and October.

After prodding by the Internal Affairs and Communications Ministry, NTT West looked deeper into the incident, uncovering the additional 900 illegal disclosures.

The business improvement order, a stiffer sanction than an administrative penalty, has been ordered because the disclosure of customer information by NTT West, which has its own telephone circuits, could lead to anticompetitive practices banned by the telecoms business law.

The order will require NTT West to improve its internal management system to ensure fair competition.

Since other ADSL providers have to use NTT’s telephone circuits, NTT West is able to obtain data on their services and may have used that information to market its own services, especially high-speed fiber-optic Internet service, analysts said.

NTT was restructured in 1999 into a holding company and subsidiaries, including regional units NTT West and NTT East. The reorganization was aimed at promoting competition in the telecoms market.

Given NTT’s continued dominance, however, the ministry set up a panel of experts last October to study further steps to revamp the company’s structure.

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