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In Japan as in many other countries there was a monopoly in the telecommunication sector. During the 90s this monopoly was open up to a regulated competition. Main competitors for fixed lines were and still are NTT and KDDI. With the introduction of mobile phone services a third player Vodafone entered the market and was later bought by Softbank. Softbank is the most aggressive company in the field, but has no leg in the fixed line. In general the fixed line business is rapidly declining and cable services even attract a fair amount of business.

For the traditional player NTT this has a big impact on their business model. So far it could keep a profitable business, because the challenging company KDDI was not really aggressive and it seems that the regulators and government are not really keen to have a cut throat competition in this field. Nevertheless new technologies will force NTT to change their business model drasticly including a much higher reduction of people.

Main challenging competitor is  Softbank whose founder is a Korean and who is trying to break up the old comrade rules in the telecom business. With flat tariffs for mobile phones Softbank cuts off in a drastic way the profit margins of the established two players. Therefore they have no other choice than to follow. NTT and KDDI try to avoid this price competition by introducing additional added value services which are liked by the Japanese. Their strategy is relatively successfully and with introduction of music and internet services they could make a stride here. If this will be efficient in the end has to be seen.

In Europe there is a Softbank bond available with a coupon of 7.75% in EUR Nevertheless the minimum amount is 50.000 EUR. For details see www.ing-diba.de. (in German).

 

Links: http://www.ntt.co.jp/index_e.html                                             
           http://www.softbank.co.jp/en/index.html
           http://www.kddi.com

Ratings: NTT                  Green
              KDDI                Green
              Softbank            Green

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