NTT share price surges after minister’s comments

18 Sep 2009

Shares of Japanese telecoms behemoth Nippon Telegraph and Telephone Corp (NTT) surged in early trading on Friday, in the wake of comments made by incoming minister of communications Kazuhiro Haraguchi, hinting at a new policy for NTT, including the possible reintegration of some of its subsidiaries. The minister told reporters that he would like to commence talks as soon as possible on how to reform the former state owned entity, amid increased competition in the global market. The Nikkei daily quotes Haraguchi as saying the government ‘will not exclude various options’ when considering NTT’s future.

Under previous administrations the focus of any attempts to reform NTT has focused on weakening its market dominance and even breaking the company up. However, the minister’s announcement has sparked an immediate reaction from supporters of increased deregulation, concerned by the possible impact of the new policy under consideration. A spokesperson for Softbank Corp is quoted as saying that any plan to reintegrate the telco’s regional operating units NTT East and NTT West Corp – one of the new plans being hinted at – would ‘render policies to promote competition in the past 25 years since the NTT privatisation a waste and fly against the interests of consumers.’