YASUO HAYASHI

President, Mitsui Europe, PLC

I am responsible for the European Operation of Mitsui and Company. On the theme given to me today I would like to talk on the basis of my experience between both public and private sector touching only on the liberalization of communication services, evolution of information society in Japan.

I was involved in Japanese government and private sector during the privatization of ………in this regard I would say that Japan is one of the countries equipped with such an infrastructure, there are 17 million subscribers using broad band connectivity which is roughly third of 50 million households in Japan. Users can have 50 mega pp s ADSL connection for around 35 USD per month and 100 mega pps, 50 th that is ….out of their home has already been launched at only 40 USD per month. Looking at the list of the European countries superiority of the Japanese ADSL services its infrastructure apparent because Japan sell everything high price there but only in the broad band service price is very low.

Next page which is analysis from another angel, the statistics prepared by ITU show the cost of broad band connectivity service per 100 pps. Comparing Japan with Germany the figure is 150^th, the chart shows that Japanese people can 100 kilo pps connectivity for 9 cents per month while consumers are always cost conscious I think this chart explains a net work environment in Japan.

I am sorry to say I front of Lord Howell but in UK where I live the price is 70 times higher then in Japan and couldn’t even be included in this chart.

This next page shows the comparison of broadband service price telecom carriers in OECD countries because of the chances of access to low price broad band services very interesting phenomena are going on. Many of the old parents of Japanese staff at Mitsui Europe have subscribed 50 ……price of 37USD per month while the main trank line between Mitsui head office in Tokyo and our office in London is linked by 2 meg with a monthly average of 2900 USD. All the parents in Japan are frustrated because they cannot use a video chat with their dear gone to London and our staff is frustrated only to be able to use to make for our serious business which requires speed, my staff member tells me with a deep sigh always why 50 meg for granny but only 2 meg for us CRS business and we pay 2000 times more obviously the type of lines in the use are quite different but sometimes something is very very wrong. In this respect I’d say that Japan is going through an infrastructure ……….however in the UK where I live public and community services over the inernet are more advanced, they have a much wider user base this could be called a service led growth path and such growth path for telecom very much differs depending on the culture, social structure and the industrial structure but anyway I hope the cost broadbanding in UK will be cheaper soon.

Next page, across the world telecommunication industry, the first stage of many major revolutions started as it is shown on this chart. Recent technological revolution in the telecom industry has had a major impact on both society and the community as you are well aware Turkey is now at major step with telecom revolution namely at the down of T regulation of its telecommunication industry. I would like further to elaborate how the regulation was achieved in Japan and to explain current state of telecom industry in the country.

Next one, number of carrier companies in Japan has undergone a steady increase since deregulation occurred as its shown here and the brought about a steady growth in telecommunication. First initiative was privatization of National Telecommunication Unit to NOTT together with deregulation of telecom industry itself to a hard competition among telecom carriers was also important strategy. For this Japanese government mobilized national railways and electricity companies for that reason they have railway and transmission networks throughout Japan. In 2001 Japanese government announced its e-Japan policy …..targets covering such topics as a number of last …..connections with optical fiber to the target pricing of broadband services all which hopefully will achieve by certain stages in the future. Taking the e-Japan policy to heart yahoobb joint venture between yahoo US and the softbank group of Japan led by Mr. Masayoshi Song started ADSL service at a very competitive price which almost by accident sparked the broadband boom in Japan, such a boom has brought us to next stage in the broadband revolution namely that of that.

Next page 8 shows the fix of deregulation on several industries in Japan and a positive effect such deregulation has had on Japan’s economy. You can see that deregulation of the telecom sector alone was responsible for almost half of the economic effect of deregulation on the economy as a whole where I can safely say that it was telecom industries deregulation and some sequent study growth of telecom and the related sectors that pulled Japan out of recession. I would particularly like to mention one point to my Turkish colleagues here today, Turkey while achieving remarkable economic performance seem to be lacked from other Eastern European countries in the deregulation of telecom industry which is very critical industrial sector, I am indeed expecting to see rapid progress in this area in this country.

Next page, the present state of telecom deregulation in Turkey very much resembles the time when Japan was tackling this issue some time ago, for the effective deregulation of telecom industry government’s role is extremely important. In term of its governmental policy Japanese government had a strong wishful picture of the proposed results of deregulating its telecommunication industry. From the very beginning Japan’s government actively set out to encourage competition between the private carriers on the very transparent system however we cannot discuss the history of Japanese telecom industry and expansion of broadband network without mentioning one private person Masayoshi Song the driving force behind the yahoobb, the first outsider who competed successfully with mtt. I don’t get into details because of time constrate but such key individuals will always be found in the beginning of any change in industry and hope drive a future business.

I do not currently know of any such key players in Turkey but I firmly believe that they exist and are waiting for the opportunity to present themselves well many small and medium enterprises are existing and they are waiting for the deregulation for their active roles in this market. But you are better to know that any executives of large companies will speak ill of Mr. Song because the team invaded the interest of the existing powerful companies but anyway we Japanese people know his role and function, his importance in the history of Japanese telecom.

In the last page as conclusion I’ll summarize, Turkey has a big advantage compared with some other countries that have undergone telecom industry deregulation in the past. Their existing technologies survived after date together with the business expotize ……….weighted industry severe competition in that world telecom market, they will provide the Turkish IT infrastructure with strong foundations in which to increase further competition or alliances in the Turkish private sector may be foreign and domestic together. Turkey can also examine both Japan’s infrastructure to …..approach or the UK service oriented path when concerning how best to move forward. Turkey is in an enviable position in my view by carefully examining how other countries have achieved before you, you can jump straight to the current Japanese level with a few years may be within a few years possibly with the support of our company Mitsui.

Finally I would like to emphasize that determination of Turkish government to pursue dynamic deregulation hence realized dynamic competition in Turkish telecom market is the key for emergence of varieties of IT and service industries with strong birth of powerful small and medium enterprises. Thank you.

Mehmet Öğütçü: Thank you Mr. Hayashi to compress all this impressive knowledge and assessments and recommendation into 10 minutes presentation. One sentence that you’ve expressed I would like to underline, Turkey can leap to Japan’s level thanks to knowledge intensive technologies industries without having going through the classical stages of development or there is a miraculous solution like this, leaping into current level knowledge economy, is this possible?

I think so yes by looking and getting experiences of other countries.