The Telecommunications Council, an advisory panel to the Ministry of Posts and Telecommunications, has produced a preliminary report calling for stepped-up competition within the NTT group. The report, however, falls far short of expectations. The overall impression is that the panel is keen to minimize change to the dominant telecom group, rather than create a new framework of competition through drastic reorganization.
The report is not final, but if it is adopted with only minor modifications Japan's telecom industry -- the NTT group in particular -- will win the tough competition in the fast-paced information-technology sector, where rapid changes are taking place. The industry must move much faster if it is to stay abreast of the times, not only in technology but in corporate management as well. Time is of the essence. An effective strategy demands bold judgment and swift action. If reform is delayed until a catch-all blueprint is worked out, it will be too late. Gradualism -- the approach recommended by the panel -- is out of touch with reality.
The half-measures proposed by the Council stem from a desire to avoid an overhaul of the NTT group, which holds a dominant position in the domestic-communications market. One proposal would reduce the holding company's stake in the long-distance and international phone company NTT Communications and in the cell-phone company NTT DoCoMo. The idea is to promote competition and boost efficiency among NTT companies by giving them greater freedom of action. That is a step in the right direction, but it is only a small step.