KDDI, SoftBank Corp. and Rakuten Mobile Announce Views on NTT Law

31/10/2023

Three key areas where Japans national interests and citizens lives could be negatively impacted

KDDI Corporation

SoftBank Corp.

Rakuten Mobile, Inc.

October 31,2023

-- (Reference Translation [

1])

KDDI Corporation, SoftBank Corp., and Rakuten Mobile, Inc. (the three companies) today announced their views on the The NTT Law: Our Perspective (NTTs Perspective) document issued by Nippon Telegraph and Telephone Corporation (NTT) [

2] on October 19, 2023.

Currently, discussions are underway within the Liberal Democratic Party and the Ministry of Internal Affairs and Communications regarding the future of the Act on Nippon Telegraph and Telephone Corporation (the NTT Law). Given its potential impact on Japans national interests and citizens lives, the three companies have highlighted the following three areas as especially significant.

Especially significant areasConcerns if each area is not upheld

Fair competition Risk of prices increasing and stagnation in the advancement and diversification of services due to a lack of new industry developments stemming from decreased competition.

Universal service obligations

(Services that should be guaranteed nationwide) Risk that NTT, which inherited special assets from its time as a public corporation, will no longer have universal service obligations, and thus have the ability to withdraw services freely, resulting in an inability to maintain services in disadvantaged areas, such as rural regions.

Foreign investment regulations for NTT Risk that NTT, which inherited special assets from its time as a public corporation, could sell the majority of its shares to non-Japanese individuals or foreign governments, potentially compromising the security of Japans telecommunications infrastructure.

There are certain descriptions in NTTs Perspective that may result in inadequate mentions of or misunderstandings regarding the factual circumstances of the current legal framework related to the above areas, as outlined below.

Shared view of the three companiesNTTs claims

Fair competition The provisions regarding fair competition function through a combination of the Telecommunications Business Act (equipment leasing rules) and the NTT Law (regulations on organization). Mentions only the Telecommunications Business Act (equipment leasing rules), while there is no reference to the provisions of the NTT Law (regulations on organization).

Universal service obligations Telephone users interests are to be guaranteed due to the obligation to provide services throughout Japan which implies the inability to withdraw services.

(Disadvantages users due to the abolition of the NTT Law) Without mentioning its obligation to provide services throughout Japan, NTT argues this obligation can be integrated into the Telecommunications Business Act.

Foreign investment regulations for NTT

The NTT Law is the most effective means for regulating foreign ownership to protect NTT and its special assets.

Strengthening foreign ownership regulation through the Foreign Exchange and Foreign Trade Act contradicts the policy of promoting investment from overseas.

Protection against foreign investment is possible without relying on the NTT Law.

NTT advocates strengthening foreign ownership regulation through the Foreign Exchange and Foreign Trade Act.

While NTTs Perspective is said to be identical to the document submitted to the Liberal Democratic Partys Project Team on the Future of the Act on Nippon Telegraph and Telephone Corporation meeting that was held on October 19, 2023, considering the potential for misunderstandings regarding its content, it is crucial that discussions on the NTT Law be conducted in a manner that avoids any potential harm to Japans national interests and its citizens lives.

Discussion on NTT Law (2.9MB) (in Japanese only)

(Reference)

180 Entities Submit Request to Oppose Abolition of NTT Law, Call for Careful Policy Discussions

[1]

This press release has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

[2]

For more information, please refer to

NTTs press release dated October 19, 2023 (in Japanese only).

Company, product and service names in this press release are registered trademarks or trademarks of the respective companies.

The information contained in the news releases is current at the time of publication. Products, service fees,service content and specifications, contact information, and other details are subject to change without notice.

LINK:	https://news.kddi.com/kddi/corporate/english/newsrelease/2023/10/31/70...
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