IP: ATIP Report: The Internet in Japan

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

       ASIAN TECHNOLOGY INFORMATION PROGRAM (ATIP)


REPORT:  ATIP96.014 : THE INTERNET IN JAPAN
To: Distribution
From: D.K.Kahaner, [kahaner () atip or jp]
      This is file name "atip96.014"
Date:  7 Feb 1996
ATIP96.014 : THE INTERNET IN JAPAN


ABSTRACT: The Internet in Japan is growing rapidly in numbers and awareness.
Generally, growth will mimic rates in the US, but will be influenced by many
factors "unique" to Japan.  Compared to the US, Internet utilization in
Japan had a "late start," and it still has to overcome severe handicaps
including basic problems such as inputting and utilizing the Japanese
language.  Further, the telecommunications field is dominated nation-wide by
a monopoly, Nippon Telephone and Telegraph (NTT), slowing drastic change.
Most importantly, instead of bottom-up grass-roots appeal, the Internet in
Japan is likely to be delivered to consumers by big corporations with
complete packages of services that include access to the Internet as a part
of other services.  Thus, while interest in both countries is at a fever
pitch, and growth rates are astonishing, the environment for growth in Japan
is significantly different and will effect developments in the coming years.


=====================START OF REPORT ATIP96.014===========================


Copyright (c) 1996 by the Asian Technology Information Program (ATIP)
This material may not be published, modified or otherwise redistributed in
whole or part without prior approval by ATIP, which reserves all rights.




                       THE INTERNET IN JAPAN
                         (J.Casman, ATIP)




 1.   AVAILABLE NOW
 2.   MEDIA HYPE DOES NOT YET TRANSLATE INTO CORPORATE USERS


 3.   WHY INTERNET USE WILL CONTINUE TO GROW IN JAPAN
 4.   USERS WANT DEPENDABILITY
 5.   THE EFFECTS OF THE RECESSION
 6.   FOUR STAGES OF DEVELOPMENT, COMPARING THE US AND JAPAN
 7.   HINDERING GROWTH, BUT NOT DESTROYING IT
 8.   CONCLUSIONS
 9.   INTERNET SERVICE PROVIDERS IN JAPAN
10.   CONTACT


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1. AVAILABLE NOW


The Internet in Japan has moved quickly from the day Friday, September 17,
1993, when commercial Internet access first became available, to a speedy
proliferation of many small Internet Service Provider (ISP) companies in
1994 and 1995. For larger network providers, (Nifty-Serve, PC-VAN and
AsahiNet/People, the Japanese counterparts to Compuserve, America OnLine,
Prodigy, Genie etc.) adding gateways to the Internet has become ubiquitous,
just like in the US. Accordingly, Japanese Internet Access Providers (IAP),
the companies that provide organizations with Internet connectivity, are
showing strong growth.  Internet Initiative Japan (IIJ), the largest of the
IAP's, now serves over 1025 domains.


Commercial access for individuals and corporations has gone from zero to
overcrowded in only two years. We have discovered 26 ISP's within the Tokyo
environs alone and according to IIJ, there are actually twice that many. At
least ten more are planned for the coming months. The majority, of course,
have extremely small user bases, numbering only in the hundreds. However,
one way or the other, most major cities in Japan have at least one dialup
access point, covering approximately 64 cities in total around the county.
This is far from universal access, but it is breathtaking growth in an
extremely short time span. If a user wants to see what the Internet is all
about, it is no longer a technical problem.


As of July 1995, 159,292 host machines were counted in JPNIC surveys, and a
monthly growth rate of 14% is estimated. This is slightly below the average
in Asia, but the installed base in Japan is also well above the average,
trailing only Australia. (Nikkei Weekly, Sept 18, 1995) Books and magazines
about building web sites can be found in any bookstore, and NHK even has
regular weekly TV shows featuring the Internet.


        ac.jp:   116199
        co.jp:     9701
        ad.jp:     1831
        or.jp:    16350
        go.jp:     5579
        others:    9632


       Total:   159,292


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2. MEDIA HYPE DOES NOT YET TRANSLATE INTO CORPORATE USERS


Besides increased accessibility, "pasocon tsushin" (Personal Computer
Telecommunications) has become a hot topic.  The Internet has become a media
darling, much like in the US.  This is largely due to the lead taken by the
US.  Vice President Gore's NII policy announcements and the US media have
been closely followed in Japan.


However, the numbers of corporate users are still extremely low, much less
individuals. According to a survey by Computopia magazine of 3540 companies
with at least one or more computers conducted in May and June of 1995,
interest in the Internet by large companies is high, but actual connectivity
is still low. 6.1% are already connected, 3.6% will be connected in the near
future and 21.8% are studying the possibly seriously. That is a total of
only 31.5% that are actively involved with the Internet.


The survey also shows a very interesting trend in the way the Internet is
being utilized. Those companies that answered "Receiving information is more
common" accounted for a whopping 63.7%, compared to just 6.4% who responded
"Sending information is more common." The survey states that there is such
an incredible gap between the two answers that this can be seen as a special
characteristic of corporate Internet use in Japan.


The Computopia survey also shows that 20.9% of companies with over 3000
employees are "Already Connected," 11.9% have plans to be connected and
25.4% are studying possibilities for getting connected to the Internet.
Companies with less than 1000 employees answered "Not Expecting to Connect"
and "Don't Know" in much greater numbers, indicating that connecting to the
Internet is still something that only larger companies feel is affordable.


Finally, in addition to the trends noted above, Japanese corporate use of
internal networking (LANs) is growing rapidly, and, this will certainly fuel
the interest in reaching outside company walls via the Internet.