Following 33 years of highly profitable monopoly, the mammoth state-owned Nippon Telegraph and Telephone Public Corp. (NTT) goes private today and for the first time will face the sting of competition.
Engineered by Prime Minister Yasuhiro Nakasone, the denationalization is expected to rival the breakup of AT&T in the United States in transforming a country's telecommunications industry.
Washington has taken a special interest in the move, foreseeing opportunities for sale of American telecommunications equipment and services in Japan.
Telecommunications negotiations that Washington and Tokyo have been conducting for the past three months have focused on highly technical regulations that now will apply to NTT and new companies that enter the field.
Japan says that all companies will be given an equal crack at the new market. However, the United States has contended that the rules were being written to discriminate against foreign suppliers.
NTT, with annual sales of $19 billion, became the world's largest phone company with the breakup of AT&T. Since its establishment in 1952, NTT has extended reliable telephone service to every corner of Japan and now operates 44 million lines.
However, it has long been known for lacking the flair for innovation and service so common in Japanese business. Its executives hope that a new spirit will prevail after Monday. A new logo will grace its office signs, telephone poles and manhole covers, of which there are so many that the changeover is expected to take five years.
NTT becomes Japan's largest private company in terms of capital ($3.1 billion), assets ($40 billion) and employes (320,000). The car producer Toyota, however, will outstrip it in sales.
At first, all its stock will be held by the government. But two-thirds of it will be sold in lots to the public, creating a windfall for the debt-burdened Japanese government.
As with the transformation of AT&T, home subscribers here will no longer be required to lease at least one phone. Department stores already are stocking up on new models. Consumers will be charged for repair visits if their personally owned phones go on the blink.
Perhaps more important than changes in consumer relations, however, will be the appearance of large numbers of new companies in a field that was formerly the preserve of NTT.
One company, calling itself Second NTT, already has incorporated and plans to build a microwave long-distance service between Tokyo and Osaka, at both ends of Japan's main industrial corridor. Optical fiber and satellite networks also are being discussed.
Large numbers of companies, including many American ones, are also planning to operate services to link computers by telephone, known here as value-added networks. These systems allow automatic transmission of data between incompatible computers.
The AT&T breakup was caused by a court order. NTT's transformation stems from a decision by the ruling Liberal Democratic Party.
Study commissions had concluded that Japan risked falling behind internationally if it kept telecommunications as a monopoly. The party concluded that creating competition would keep industry on its toes.