TOKYO – NTT, Japan’s leading telecommunications group and one of the world’s largest, last month continued the global expansion it began last year, buying a U.S. Web-hosting company and taking a stake in a Dutch mobile phone company.
The company has been hesitant about moving out of the cocoon the Japanese market provided but last December took a 19 percent stake in Hong Kong’s Hutchison Telephone and then went on to buy 10 percent of Verio in the United States.
In May, NTT Communications, its long distance and international arm, paid $5.5 billion for the rest of Verio's shares. The firm is one of the largest Web-hosting companies in the world that is home to 400,000 Web sites and operates an Internet backbone network in the United States.
At the same time, NTT DoCoMo, the company’s wireless unit, took a 15 percent stake in KPN Mobile, a division of the leading Dutch telecommunications company, for 5 billion euros, or $4.5 billion, its first move into the European market.
In announcing the investment at a press conference here, NTT DoCoMo president Keiji Tachikawa said KPN Mobile “was an excellent platform for expanding into Europe.” DoCoMo has 29 million subscribers.
The new combination had hoped to make a bid for Orange PLC, Britain’s third largest mobile phone operator, an investment valued at $45 billion. But France Telecom moved more swiftly and bought out the company from under them.
Analysts noted that NTT is a late starter in international markets and will have to move fast to catch up with U.S. and European giants who have been wheeling and dealing in telecommunications markets for a decade.
Both Verio and KPN are starter deals with some built-in disadvantages, the analysts said. Verio hosts small companies and thus isn’t much of a lure for big multinational accounts.
KPN is in something of a bind as it tries to move into the top trio of European mobile operators. Weeks before the Japanese deal, an effort to merge with Spain’s Telefonica fell apart. It needed both money and technology.
DoCoMo does too. On May 31, it announced plans to issue new shares worth $9.4 billion to finance new foreign investments. Talk in Tokyo is that it wants to buy a 10 to 20 percent stake in Voice-Stream Wireless, a U.S. mobile phone company, and in SK Telecom, South Korea’s biggest.
Europe, the United States and Asia aren’t just new markets for DoCoMo. It has an advanced, high-speed mobile phone platform, wideband code division multiple access, and hopes to make it a global standard for the next generation of mobile phones.
Parent NTT made public a three-year business plan in April that called for global sales by 2002 worth 100 billion yen, or $918 million. NTT Communications and DoCoMo are to take the lead in winning this new business.
