Changes and deregulation in the Japanese telecommunications market

The Japanese telecommunications market has experienced drastic changes since the privatization of NTT and the introduction of competition in 1985. Rate reduction in long distance services has been remarkable, and NTT's revenue share in the long distance market has declined sharply. The growth in mobile services and Internet services are epoch-making, and POTS is showing signs of decline. Behind the scenes is the progress of deregulation in remedying the distortion in the market structure. The establishment of new interconnection rules and the reorganization of NTT into one long distance company and two regional companies are the most important outcomes. With this deregulation the Japanese telecommunications industry is expected to develop from managed competition to full competition. However, new challenges for telecommunications regulation are emerging with the progress of competition and new multimedia services. One of them is the universal service. Cooperation among regulators, operators, users, and scholars is required to accommodate the change.