AT&T; Launches Computer Network Venture in Japan

AT&T; launched a joint communications venture in Japan on Wednesday, expecting to “dramatically increase” its sales share in a sector that the American government sees as a key test of Japan’s willingness to open its market wider to foreigners.

American Telephone & Telegraph joined 16 Japanese companies to start Japan Enhanced Network Services Corp., a system to permit communication among dissimilar types of computers. It will compete with other companies in the more than $7-billion Japanese telecommunications market.

The new company will “dramatically increase AT&T;’s market share in Japan” and boost U.S. revenue in the sector, AT&T; spokesman John Cusick said.

U.S. officials have said that Japan’s policy toward its telecommunications market will symbolize its overall willingness to open up to greater foreign competition. Last year, U.S. companies sold only $126 million worth of telecommunications equipment in Japan, while Japanese producers sold $2 billion worth in the United States.

Overall last year, Japanese exports to the U.S. market exceeded U.S. sales here by $36.8 billion.

AT&T; and other joint-venture officials estimated that the project will result in sales of between $200 million and $400 million by 1990.

Prime Minister Yasuhiro Nakasone has pledged to announce market opening steps later this month in electronics, lumber products, medical equipment and pharmaceutical supplies and telecommunications.

“The tie-up will help AT&T; erase its own deficit with Japan,” Cusick said, noting that the communications giant bought $250 million worth of Japanese products last year while selling only $80 million worth to Japan.

On April 1, Japan turned the state telecommunications monopoly, Nippon Telegraph & Telephone, into a private company and opened the market to competing companies.

U.S. trade officials have urged Japan to speed the entry of foreign firms into the telecommunications market by relaxing strict standards and certification procedures and granting them a part in shaping the structure of the marketplace.

AT&T;’s new service enables computers of different makes to talk to one another. It could tie a company more efficiently to outside information and streamline the customer’s complete operations, from manufacturing and the warehouse to distributors.

In addition to providing an information communication system modeled after AT&T;’s Net 1000 service in the United States, the consortium will offer to process information, develop software and sell or rent computers, communications equipment and other related goods.

AT&T; plans to link Tokyo, Nagoya and Osaka with the enhanced network by October, launch a nationwide service by the end of 1986, connect the United States and Japan Net 1000 systems with an optical fiber running below the Pacific Ocean in 1988 and include a compatible system from Europe soon thereafter.

AT&T; holds a 50% share in Enhanced Network Services and by October plans to provide half of the company’s $40 million in capital.

AT&T; Chairman Charles Brown told a news conference that the partnership shows “a belief that cooperation with Japanese companies is the key to successful market entry and to an orderly growth in Japan’s information management industry.”

ENS shareholders include Industrial Bank of Japan, Mitsui & Co. and Sony Corp.