YOU ARE AT:Archived ArticlesJAPAN WILL CONSIDER OPENING UP PERSONAL HANDYPHONE MARKET

JAPAN WILL CONSIDER OPENING UP PERSONAL HANDYPHONE MARKET

WASHINGTON-The Clinton administration has said Japan will consider opening its personal handyphone system equipment market, a potential breakthrough for American wireless suppliers.

Last week’s announcement came as the United States completed its annual review of telecommunications trade agreements with Japan, Korea and Mexico.

“Ensuring that our trading partners are living up to their obligations is a top priority of President Clinton’s trade policy,” said Mickey Kantor, U.S. trade representative.

“U.S. telecommunications equipment and services are the most technologically advanced and competitive in the world,” added Kantor. “It is essential that U.S. firms be given the opportunities promised under our trade agreements and that we use our trade tools to gain access for U.S. firms and workers to new opportunities in important telecom markets.”

Personal handyphones, a less expensive but technically inferior alternative to cellular phones, have become a smashing success in Tokyo and Sopparo since their introduction last summer. Service was supposed to start last fall in Osaka.

PHS uses microcells, which are smaller and less powerful than cellular base stations, and are located every couple of blocks. PHS systems work well for pedestrians in densely populated urban areas, but they lack the sophistication to switch vehicular calls from cell to cell. Early projections are for 38 million PHS customers by 2010, a potentially huge market for American equipment manufacturers.

U.S. and Japanese trade negotiators have been arguing for months over whether a PHS network, licensed in Japan to a partnership led by Nippon Telegraph and Telephone Corp., is subject to a 1994 bilateral accord requiring NTT to liberalize telecommunications equipment procurement.

The United States has consistently maintained that NTT Personal Communications Network Inc., one of three PHS consortia licensed by the Japanese Ministry of Posts and Telecommunications, is bound by that agreement.

Japan, for its part, has insisted NTT Personal Communications Network is a new company with private investors as opposed to being a spinoff (like cellular carrier NTT Mobile Communications Inc.), and therefore is not bound by the 1994 telecommunications pact.

U.S. trade officials argue NTT Personal Communications Network is not independent of NTT, which went private in 1985 yet remains two-thirds owned by the Japanese government. NTT, they point out, still holds 76 percent interest in NTT Personal Communications Network.

Elsewhere, Kantor reported USTR made limited progress with Mexico on procedures for acceptance of test data for telecommunications product safety requirements. He said the matter will be subject to dispute settlement procedures of the North American Free Trade Agreement.

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