[JAPAN] Four Companies Form Multimedia Group

[David Farber <farber () central cis upenn edu>]

Four Companies Form Multimedia Group
 (from Asahi Shimbun, 3/17/94)


* Mitsubishi, Mitsui, Tokyo Electric Power, and Tokyu are creating a
communications concern with telephone and cable TV that could rival
industry leader NTT. *


        Four companies said Wednesday that they will participate in
the first tie-up of Japanese telephone and cable television firms, with
an eye toward challenging multimedia giant Nippon Telegraph and
Telephone.
        Mitsubishi Co., Mitsui & Co., Tokyo Electric Power Co., and
Tokyu Corp. have all agreed to work together to develop multimedia
businesses by connecting telecommunications and cable television
networks.
        Getting ready for a wave of planned communications
deregulation, the companies will establish a study group for
next-generation communications networks.
        The group will begin experiementing with interactive services
by linking Tokyu's cable television network and the optical fiber
network of Tokyo Telecommunication Network Co. (TTNet), a regional
telecommunications carrier of which Toyko Electric, Mitsubishi, and
Mitsui are major shareholders.
        This will mark the first tie-up between a cable television
network and a regional telecommunications company, a milestone in the
building of a multimedia network.
        The number of firms participating in the tie-up is expected to
expand to between 10 and 20, according to the four companies, giving
it the potential to rival commnuications giant NTT, multimedia experts
say.
        In experiements on interactive services that are expected to
start soon, Tokyu Cable Television will link its 80,000-household
coaxial cable network to TTNet's optical fiber telecommunications
network.
        That tie-up will offer a wide range of telephone services and
interactive features such as video on demand, which enables people to
watch television programs whenever they like.  Television shopping,
karaoke, and video games are also being considered.
        Several hundred households will participate in test marketing
to study technical problems and user demand for practical
applications, the companies said.
        The project is seen as a winning situation for all four
companies.  The way will be paved for TTNet to spread its optical
fiber network, now only for coroporate use, to regular households.
        The tie-up will help Mitsubishi and Mitsui, late bloomers in
the cable television business, catch up with other companies.
        Moreover, for cable television companies, many of which are in
the red, the project is expected to provide opportunities to increase
subscribers by offering new kinds of services with minimum investment.
        Members of the study group plan to exchange technical
information and conduct research on multimedia businesses in the
United States and other countries.
        In the United States, where interactive cable television is
regarded as the core of the multimedia business, more regional
telecommunications carriers are joining hands with cable television
companies.