Controlled Competition in The Japanese Telecommunications Equipment Industry: The Case of Central Office Switches

In Japan complex telecommunication equipment has been developed by a unique form of organisation involving long-term relationship between the country's main telecommunications operator, NTT, and a small group of major equipment supplying companies, NEC, Fujitsu, Hitachi, and Oki. This form of organisation has sometimes been referred to as the 'NTT Family System' and existed, officially at any rate, until April 1985 when NTT was part-privatised. How did the NTT Family System work? How successful was it? How well has it prepared the Japanese telecommunications companies for the looming battle in the global market for telecommunications equipment which is rapidly being liberalised? How is the System changing under the influence of internationalisation and liberalisation and the internal and external pressures that are being put on the Japanese Government and NTT to 'open up' to competition? These are the major questions that are analysed in this paper.