The Japanese telecommunications industry basically developed alongside the creation of a modern state in Japan by the Meiji government. As in European nations, it was a state monopoly, which continued until 1985 in the case of Japan.
After the devastation of World War II in which the Japanese communications network experienced catastrophic damage, domestic telecommunications became a state monopoly under Nippon Telegraph and Telephone Public Corporation (NTT) from 1953, while international telecommunications was monopolized by Kokusai Denshin Denwa Company (KDD), which, despite being a joint-stock corporation, was under the jurisdiction of the Japanese government. Free market entry by private firms was not permitted during this time. |
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Home telephones used in various times |
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Public telephones used in various times |
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Although advanced as a state monopoly, the recovery of the Japanese telecommunications network proceeded at a swift pace. The development of the infrastructure progressed steadily, and direct dialing was achieved nationwide in 1979. However, the inefficiency of and wasteful spending by state-owned monopolies were gradually revealed. Following the lead of the UK in its privatization of British Telecom, the Japanese government proceeded to privatize NTT as part of its administrative reforms of the 1980s. Policies to promote competition in telecommunications were also introduced. After NTT's privatization in 1985, new common carriers such as Japan Telecom (major shareholder at the time: the now defunct Japan National Railways), Daini Denden Incorporated (DDI) (founded by private sector companies) and Teleway Japan (backed by the Japan Highway Public Corporation) entered the long-distance market, while two companies entered the international telecommunication services arena.
Long-distance and international calling rates gradually fell as a result of competition between the carriers. The opening of the communications equipment market, which had until then been monopolized by just a handful of companies dubbed "members of the NTT family," progressed. The liberalized sale of terminals resulted in lowered prices for telephones as well.
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