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Telecommunications industry

Japan's Fiber Optic Push: A Multibillion Dollar Investment

Strategic Insights

— 2 min read

The Japanese government is heavily investing in a nationwide fiber optic network, with approximately $6.1 billion allocated for its construction. The network will be used by a public corporation, and existing cable service providers face a ban from using fiber optic cable networks in certain areas to protect their interests. Meanwhile, Japanese companies like NEC are selling fiber optic equipment to China Telecom and laying cable in China, while Italian cable maker Sirti S.p.A. has attracted interest from Pirelli S.p.A. Despite the growth in the industry, Fujikura's profit from fiber optic cable sales has been disappointing, and the company's operating profit has fallen by 24%.

Key Takeaways:

  • The Japanese government is investing $6.1 billion in a nationwide fiber optic network.
  • Existing cable service providers in Japan are banned from using fiber optic cable networks in areas where analog lines are used.
  • China Telecom has purchased fiber optic transmission equipment from NEC worth $13.07 million for its 4,000 km Hohot-Beihai trunk line.
  • Total investment in the China Telecom project is expected to exceed $120 million.
  • Pirelli S.p.A. has given up on its attempt to buy a stake in Italian cable maker Sirti S.p.A.
  • NKF Holding NV, a Dutch cable maker, has signed a $24.3 million contract to supply telecommunications cables to Jamaica.
  • Fujikura's pretax profit of $55.4 million for fiscal year 1997 was flat from the previous year, and $14.6 million less than earlier projections.
  • China plans to invest $54.2 billion in communications facilities over the next three years, including mobile communications, fiber networks, and data communication systems.
  • The construction of 14 fiber optic trunk lines in China is underway and is expected to be completed by year's end or early next year.

Statistics:

  • $6.1 billion: The amount allocated by the Japanese government for the construction of a nationwide fiber optic network.
  • $13.07 million: The value of the contract signed by NEC with China Telecom for fiber optic transmission equipment.
  • $120 million: The total investment expected in the China Telecom project.
  • $24.3 million: The value of the contract signed by NKF Holding NV with Cable & Wireless Jamaica Ltd. for telecommunications cables.
  • $55.4 million: The pretax profit of Fujikura for fiscal year 1997.
  • $54.2 billion: The amount China plans to invest in communications facilities over the next three years.

Sources:

  • Asahi Shimbun newspaper
  • Dow Jones
  • Kyodo news agency
  • Xinhua news agency
  • New York Times
  • Nihon Keizai Shimbun
  • Business Weekly Of China Daily

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