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June 23, 1987

SLOW START FOR INDEPENDENT TELECOMMUNICATIONS FIRMS IN JAPAN

By CBR Staff Writer

The four new Japanese telecommunications companies that opened for business in competition with Nippon Telegraph & Telephone last year, managed to dent the former monopoly’s share of the market by just 2% of the leased line business in which they compete, reports our Tokyo correspondent. And their baptism was a decidedly painful one: the four – Japan Telecom, Dainidenden, Teleway Japan, and Tokyo Telecommunication Network Co suffered large recurring losses totalling $93.7m, largely from servicing the cost of their expensive equipment. That was on aggregate business of just $5.03m, which is lower than they had expected. However prospects look brighter for this year, with more users expected to be drawn into the leased line services in Tokyo and Osaka area, and with the introduction of Tokyo-Nagoya-Osaka long-distance telephone services expected in September; the independents will be undercutting NTT’s rates on this service by about 25%.

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