Takayuki Morita, President and CEO, NEC
NEC Corporation got its start in 1899 as Japan’s first joint venture with foreign capital. Founded under the motto of “better products, better services,” it has evolved into one of the country’s leading information technology and electronics companies while maintaining its original spirit. The company has pioneered global technologies including color displays and 3G support for mobile phones and has more recently developed the world’s most accurate facial recognition technology. Takayuki Morita has been with NEC Corp since 1983. For decades, he has been a leading voice in the company’s strategy, most recently in charge of the company’s overseas business operations before becoming senior executive vice president and chief financial officer. On April 1, he became the company’s president and CEO.
You have been with NEC Corp since 1983, where you held several different roles before being named the company’s new CEO and President. From your wide-ranging experience, how would you describe the corporation’s traditional strengths and competitive advantages?
NEC’s greatest strengths are its cutting-edge and unique technologies that it has accumulated over a 120-year history since its founding. These include biometric authentication, 5G, and a wide variety of other AI technologies. A range of objective third-party organizations, including the National Institute of Standards and Technology (NIST) in the United States and numerous papers accepted by respected international academic conferences, have evaluated the accuracy of NEC’s biometric algorithms and the quality of numerous other NEC technologies. Among other accomplishments, we are proud to have submitted the number 1 most accurate facial recognition algorithm according to NIST tests for overall accuracy and accuracy across demographic groups.
Other strengths include NEC’s engineering ability to build and securely operate systems, equipment, and infrastructure for communications networks such as submarine cables and large-scale computers for companies and government organizations.
As the new CEO, what is your overarching vision and some of the main goals that you have in mind for the company?
With the rapid progress of digitalization throughout the world, NEC aims to become Japan’s representative technology company in terms of global innovation. In pursuit of this, I aim to continue changing as an individual, along with our employees and the company as a whole.
“We expect industries to undergo significant transformation in the next five to 10 years and NEC has significant assets and capabilities to help drive this transformation.”
The world is becoming increasingly connected and network technologies will play a transformative role in not only changing how we communicate but more so in terms of how business is conducted across verticals. We expect industries to undergo significant transformation in the next five to 10 years, and NEC has significant assets and capabilities to help drive this transformation.
Research suggests that the COVID-19 pandemic has acted as an accelerator for technological change and impacted the strategies of most major companies. What impact has the pandemic had on NEC’s strategy?
COVID-19 has caused the digitalization of the economy and society to rapidly accelerate. As one of Japan’s leading technology companies, we see it as NEC’s mission to support and promote this process. With the progress of digitalization, the integration of the governmental and financial fields is also progressing. NEC is contributing to the digitalization of the economy and society by developing digital government and digital finance solutions.
The NEC Group of companies includes KMD, the largest IT company in Denmark, where government agencies are considered to be the world’s most advanced digital institutions, and Avaloq, a Switzerland-based leader in digital finance. We are seeking to take advantage of synergies with each of these partners.
“Communications are the crucial infrastructure that underpins the economy and society, and are indispensable for the development of digital transformation. NEC is committed to building secure and smart communications networks.”
Communications are the crucial infrastructure that underpins the economy and society, and they are indispensable for the development of digital transformation. NEC is committed to building secure and smart communications networks.
NEC is present in the United States. How do you envision the corporation’s future there?
NEC is continually working to further align our US business and corporate citizenship activities with our goal of being a social value innovator, and we plan to continue helping US public-sector and private-sector customers securely and safely meet their identity management, communications, and other technological needs.
NEC is proud to have longstanding biometric identity management partnerships with US commercial entities, federal government agencies and state and local government agencies. As an example of our commitment to leveraging our technologies to help tackle ever-evolving societal challenges, this past year, we were excited to provide the Hawaii Department of Transportation with a multimodal biometric solution that can detect elevated body temperatures and help keep travelers and employees safe in Hawaii airports.
In addition to our expanding biometrics business, NEC is helping to build strong, secure, accessible communication networks as a trusted vendor throughout the United States through 5G initiatives supporting Open RAN (Radio Access Network). The company also continues to advance initiatives to ensure that our internal and external business practices help solve societal challenges and promote a more diverse, equitable and inclusive culture.
In November, the UK government announced it was launching a trial with NEC to test 5G communications technology. Do you have any updates from that project?
NEC has established a business development base in the United Kingdom and is participating in the UK government’s 5G Open RAN demonstration project and will be carrying out demonstration experiments this summer. In addition, NEC is also active in 5G developments and deployment across a variety of countries, including the United States.
Overall, what benefits does NEC 5G technology offer over traditional competitors, particularly Huawei?
NEC can provide end-to-end services and products that include base stations, transmission lines, core networks, and system construction for operations management, customer management and billing. This is in addition to manufacturing equipment based on a trusted supply chain, including the development of submarine cables and satellite communications.
The company is also continuing to proactively expand its telecommunications business and building secure telecommunications networks throughout the world. NEC was the first company to provide 5G Open RAN base stations for a major carrier in Japan, and has a successful commercial track record.
“NEC views 6G as a social system that integrates communications infrastructure and advanced technologies for processing and utilizing enormous amounts of data in real-time.”
Japan is also looking ahead to 6G technology by 2030. How do you think the next generation of this technology could impact societies? And what is NEC’s plan in terms of 6G?
NEC views 6G as a social system that integrates communications infrastructure and advanced technologies for processing and utilizing enormous amounts of data in real time. We will promote industry-government-academia collaboration centered on its cutting-edge technology so that 6G can help create the social values of safety, security, fairness, and efficiency, thereby contributing to the achievement of sustainable development.
The rise of digital communications has brought with it many positives, which have been made abundantly clear during the pandemic, but also concerns around privacy, technology addictions and cybersecurity. What is your company doing to leverage the strengths of ICT for positive digital transformation while reducing the potentially negative aspects of the technology?
NEC conducts business activities with the highest priority on respect for human rights and has formulated the NEC Group AI and Human Rights Principles with respect to the utilization of technologies such as AI and biometrics. NEC’s AI and Human Rights Principles promote: fairness; privacy; transparency; responsibility to explain the effects, value, and impacts of AI utilization; proper utilization of AI technology; continued development and improvement of AI technologies; and dialogue with multiple stakeholders.
In addition to the laws and regulations of each country, NEC is working to utilize digital technology in accordance with this policy while also working with customers to ensure respect for human rights.
We are working to protect data privacy and security across our business operations. This includes incorporating policies and processes from product design, to screening potential customers and partners, to deploying solutions in close coordination with our customers.
What are your thoughts on Japan’s vision for Society 5.0 and how NEC can play a role in the broader digital transformation of society?
NEC strongly promotes Society 5.0 by working to help solve social issues in Japan and internationally through our business practices and technological solutions. We strive to promote the social values of safety, security, fairness, and efficiency to build a more sustainable world in which all people have the opportunity to reach their full potential. We are also committed to partnering with policymakers, NGOs, members of the public, and other corporations to ensure that the digital transformation that governments around the world envision protects human and civil rights as well as civil liberties.
To explore how NEC can further align its business practices with its values, we have launched ongoing Environmental, Social, and Corporate Governance (ESG) initiatives. At the same time, we’ve consulted and partnered with diverse experts and stakeholders around the world to leverage our technologies in ways that make progress towards achieving the UN’s Sustainable Development Goals.
One of Japan’s shorter-term goals is to set up a Digital Agency this year to accelerate the digital transformation of government processes. What is your evaluation of the Japanese government’s willingness and ability to make this digital transformation?
Digital transformation is one of Japan’s most important issues right now, and NEC welcomes the government’s efforts to digitize, including the establishment of the Digital Agency. We aim to take a leading role in the digital transformation of Japan’s economy and society as one of the country’s representative technology companies.
Mickey Mikitani, Chairman and CEO, Rakuten
Rakuten is a leading Japanese digital company that operates in e-commerce, financial services, communications, e-books, mobile phones and much more. Sometimes likened to the Amazon of Japan, it has a track record of embracing disruptive innovation that creates big changes. In Japanese, Rakuten stands for “optimism,” which lies at the core of its identity as it now sets out to digitize society, democratize mobile communications and even fight cancer. The company has a large ecosystem of businesses that are present in 30 countries, including the US. Likewise, it has made significant investments in innovative American enterprises. Mickey Mikitani, the founder, CEO and chairman of the company, has a compelling past and fascinating vision for the future, which he explains in detail here.
In 1997 you founded Rakuten, which has grown into one of the largest companies in Japan. How would you describe Rakuten’s key strengths and competitive advantages, and how do you hope to harness those strengths for continued success?
I started Rakuten in 1997 with a goal of empowering local merchants to realize their dreams through technological change. Japan had propelled itself into the economic stratosphere thanks to its strength in precision manufacturing, churning out world-class automobiles, consumer electronics and petrochemicals. But the world was changing. I was convinced that we must reinvent ourselves as a digital services superpower, embracing the Internet-driven sharing economy – and opening up to welcome talented foreigners.
We obviously hit a sweet spot: in little more than two decades, Rakuten has grown from a company of just six people in Japan to a global company of more than 23,000 employees. Our global gross transaction value – the amount of business conducted on our platforms – surpassed 19 trillion yen (S180 billion) in 2019.
Japan is changing. It has made giant strides in developing its services – selling tourism and gastronomy, computer games – even Manga. The number of visitors, less than ten million a few years ago, reached about 32 million in 2019. It will pick up again after COVID-19.
Rakuten started as an e-commerce company 24 years ago, but has grown into a dynamic tech innovator and we’re now being recognized globally for our groundbreaking leadership in the telecommunications space: in our ecosystem, we offer more than 70 services in e-commerce, fintech, digital content and communications. Our global membership has grown to around 1.5 billion people around the world. Our members are rewarded for making Rakuten part of their everyday lives with benefits including Rakuten Points, cashback and more, depending on their location. In terms of innovation, at Rakuten we’re not afraid to try something new. In fact, we built the world’s first end-to-end, cloud-native, software-centric mobile network – designed with open and interoperable technologies from multiple partner companies from around the world – and launched it in less than 18 months.
Research suggests that the COVID-19 pandemic has acted as an accelerator for technological change and impacted the strategies of most major companies. What impact has the pandemic had on Rakuten’s strategy?
Rakuten’s key principle for success is to always improve, always advance. COVID-19 made our services more important than ever. In the early days of the pandemic, millions of people who were at home under quarantine turned to us and we responded with numerous initiatives – supporting merchants struggling with restricted offline operations in Japan and France, providing free content on Rakuten TV and Rakuten Kobo, and Rakuten Viber joined forces with the WHO to combat COVID-19 misinformation.
Perhaps our greatest accomplishment during the pandemic was not only the commercial 4G launch of Rakuten Mobile in April 2020, but also our 5G commercial launch just five months later. Until now, a few vendors dominated telephone infrastructure, building expensive, vertical, top-down, proprietary systems in which they control both the software and hardware. Rakuten built and launched in spring 2020 the world’s first large-scale commercial open-architecture network. Our network is horizontal, bottom-up, and open software-driven, constructed from off-the-shelf parts and powered by cloud computing. The new network’s advantages are clear: 30-40% percent savings compared to traditional networks for present 4G technology and up to 50 percent savings for next-generation 5G networks. In Japan, home to high-priced mobile telephony, we slashed the average monthly mobile subscription by 60 percent, while offering the country’s first unlimited data plans.
We’ve had more than two million Rakuten Mobile service applications, mostly being completed online. And on the technical side, we’re on track to deploy around 27,000 base stations to expand our network to achieve 96% population coverage in summer 2021, five years ahead of schedule.
“The pandemic has proven the resilience of our diversified business model, centered on the Rakuten ecosystem. It is accelerating cashless payment trends and spurring consumers around the world to shift to online services for their daily needs like never before”
The pandemic has proven the resilience of our diversified business model, centered on the Rakuten ecosystem. It is accelerating cashless payment trends and spurring consumers around the world to shift to online services for their daily needs like never before. We are well positioned to support this influx of online customers – especially in Japan. Domestic e-commerce continued to see double-digit growth in 2020, our fintech businesses such as Rakuten Bank, Rakuten Card and Rakuten Securities are leading the industry – the Rakuten ecosystem is thriving.
Rakuten is present in the United States. How do you envision the corporation’s future there?
Our Americas businesses, with a regional head office in Silicon Valley, provide a customer-centric ecosystem. Our shopping service has rewarded its members with more than $2 billion in cash back refunds and is constantly striving to find new ways to reward its members. Our content businesses have seen incredible growth. Rakuten Viki streams video content produced in Asia to its millions of members. Rakuten Kobo, our digital book service, headquartered in Toronto, now has more than 32 million members globally. That makes it the main competitor to Amazon’s Kindle.
Last year, Rakuten launched the world’s first fully virtualized mobile network and 5G services, in collaboration with the US company Altiostar, which you also invested in. Please elaborate on the strengths of this technology and if you see potential to export it to the US.
When creating the Rakuten Mobile network, we sought to do something that’s never been done before. Our goal was to democratize the telco industry by lowering the cost barrier not only in Japan, but around the world. And now, with 5G, as the world stands on the cusp of a telecommunications revolution – one that resembles how personal computers replaced mainframes – we are bringing Japan back into the telco field globally.
“Now, with 5G, as the world stands on the cusp of a telecommunications revolution – one that resembles how personal computers replaced mainframes – we are bringing Japan back into the telco field globally.”
Importantly, our new generation mobile phone tech infrastructure is unusual in that it draws on technology vendors from Japan, the U.S., Finland, Taiwan, Korea and elsewhere, but not from vendors which have been spotlighted due to security concerns. Not surprisingly, US and European authorities have been watching our progress.
In April 2020, we accomplished what many thought to be impossible. We designed and built the world’s first end-to-end, cloud-native, fully virtualized mobile network and launched a 4G LTE service in Japan, during what many describe as the most challenging times of this century. Then, just six months later, we launched 5G service, offering customers an upgraded service plan which adds 5G to the existing plan for no additional fees.
To do this, Rakuten Mobile brought together some of the most innovative and agile technology vendors — from large, well-known US-based mobile industry suppliers like Intel and Qualcomm to emerging players such as Altiostar and partners from Japan like NEC. This network is reliable, flexible, scalable, secure and resilient. Perhaps equally as important, the network had to be low cost so that people could access mobile services more affordably than ever before.
Rakuten Mobile has established an entity in the US to support product development and business growth in the region. The product and growth opportunities are for the Rakuten Communications Platform (RCP), a cloud platform offering telco services based on the architecture behind Rakuten Mobile in Japan.
The goal behind RCP is to empower telcos and enterprises around the world to easily draw on what Rakuten Mobile has already done in Japan: offer a secure and open mobile network at high speed and low cost, generate new revenue streams and offer customers innovative and immersive experiences. RCP and its open and interoperable design will provoke a global shakeup for the telco industry, as the entrance barriers crumble for startups like US-based Altiostar. Increased competition from new suppliers from Japan, the US and Europe will create a greater opportunity to get into the 5G market. The world is already taking notice of Rakuten Mobile and RCP. We have announced partnerships with leading telco industry companies like Telefónica and STC to bring this revolutionary mobile infrastructure to the world.
Japan’s vision for Society 5.0 is both fascinating and ambitious. What are your thoughts on this vision and how Rakuten can play a role in the broader digital transformation of society, both in Japan and beyond?
We can be a leader in bringing digital transformation to Japan. Since the formation of our company 24 years ago, empowering society through innovation and technology has been our most important goal. That founding vision continues to drive us today. It’s why we’re investing heavily in pioneering mobile technology that will make communicating faster, more reliable and more affordable for individuals around Japan and the world. It is why we are developing our capabilities in AI, cloud computing, autonomous drone delivery, smart logistics and more.
Artificial intelligence needs to become a priority. At Rakuten, we are working hard to personalize the online shopping experience. Our image recognition of products utilizes deep learning, classifying items automatically based on images. Without the intervention of a human, we aim to have computers recognize products – helping both our merchants and their customers. Thanks to AI, we hope to replicate online Japan’s famed omotenashi spirit of selfless hospitality, where hosts anticipate and fulfill consumer needs.
The foundations upon which we built our society are changing from their very roots. If we built our society from scratch today as if it were a startup, I don’t think it would turn out how it is now. That’s why it’s so important to look forward 100 years from now and ask ourselves, ‘what kind of world will we be living in?’ We ask ourselves this question every day.
“We need to think about how digital infrastructure, despite being invisible, brings about huge value for society, just like physical infrastructure does. This is the key to revitalizing Japan’s economy on a global scale.”
We need to think about how digital infrastructure, despite being invisible, brings about huge value for society, just like physical infrastructure does. This is the key to revitalizing Japan’s economy on a global scale.
Digital transformation is endless. There is no finish line. That makes it sound really hard, but the truth is it’s the same for the private sector ― they are constantly reacting swiftly to new technologies, working out what they can adopt and how they can adapt. The government has to do that too. That’s a habit we need to form. This is also related to the importance of building a sustainable future. Rakuten was selected for the Dow Jones Sustainability World Index and certified as an Eco-First Company by the Japanese government.
One of Japan’s shorter-term goals is to set up a Digital Agency this year to accelerate the digital transformation of government processes. The strategy draws on the idea of “government as a startup.” What is your evaluation of the Japanese government’s willingness and ability to make this digital transformation? And what role do you see for private sector companies such as Rakuten in this process?
Rakuten is vocally supportive of this idea of a Digital Agency to bring the Japanese government into the modern technology era. In fact, we had a meeting with Digital Transformation Minister Takuya Hirai to support the Agency. We encourage the government to work with Japan’s innovative and world-known technology companies. But we also encourage the Digital Agency to involve Japan’s startup companies.
An open, internet-savvy and revitalized Japan means overturning its approach to change and to outsiders. Japan’s declining demographics are well known. We need to encourage labor mobility and to welcome skilled foreign workers. Too few Japanese change jobs and embrace new challenges. Too few study computer coding and English – the global language of business. My own company Rakuten made English its official language over a decade ago and about 80% of our new engineering hires are non-Japanese; about a fifth of all our employees in Japan are non-Japanese, representing more than 70 nationalities.
Your father was Japan’s first Fulbright Scholar to the US, which brought him and your family to Yale in the 1970s. Decades later, you attended Harvard Business School and are still connected to the US through several businesses. How has your connection with the US shaped your life and career?
Study abroad and the United States’ culture of innovation and academic excellence has had an enormous impact on my own life. My father was among the first generation of Japan’s Fulbright Scholars to the US, and his experience studying economics at Harvard University and later teaching at Yale University left an indelible impression on my own life. It influenced my decision to study abroad and earn my MBA at Harvard Business School.
I am very excited to partner with the prestigious Fulbright program to open doors for Japan’s leaders of tomorrow to gain an international education and global perspective through the Fulbright-Mikitani Memorial Grant, which we recently launched.
On the flip side, as someone who is well acquainted with both cultures, what would you say are some aspects of Japanese culture that could be useful to help Americans achieve professional success?
Rakuten’s corporate culture values the spirit of entrepreneurship, lofty ambitions and a sense of unity. Good examples of how these ideals are put into practice are the Asakai (morning meetings), the concept of Shikumi, and omotenashi hospitality. Even the design of Rakuten’s corporate offices sustains and enhances a dynamic and inclusive culture.
“Rakuten’s corporate culture values the spirit of entrepreneurship, lofty ambitions and a sense of unity.”
In the case of Rakuten, we hold Asakai once per week. They are attended by every full-time employee in the company, whether in-person (during normal times) or via teleconferencing. The agenda typically includes a CEO update, as well as updates from individual businesses within the Rakuten Group on their accomplishments and best practices. Asakai are a way of focusing everyone’s minds on the same goals and maintaining awareness of areas requiring daily improvement. They also help employees keep abreast of developments across the group and understand the role their business plays, which in turn encourages employees to consider how to apply this knowledge in their work.
The Omotenashi service quality is an experiential element of Japanese culture at the heart of all of Rakuten’s services. Omotenashi represents Japanese hospitality, which is defined by attention to detail and anticipating the needs of the customer. Each service experience presents unique opportunities to deliver on the omotenashi promise. Omotenashi can be seen when merchants from the Rakuten Ichiba marketplace handwrite personalized notes to thank customers.
One of our five principles for success is shikumika. or the creation of a system that allows you to build on each day’s efforts. The equation is this: “Hypothesize → Practice → Validate → Shikumika.’ While we have a wide variety of global businesses and services, our strength is in our shikumi — the consistent elements that run across our company. The use of shikumi allows us to communicate across multiple teams, to mobilize our resources quickly and efficiently and to achieve new operational heights, whether we’re enriching our online fashion offering or launching a new mobile service.
Rakuten is also involved in pioneering cancer research. What can you tell us about this initiative?
In 2013, I made a large investment into a San Diego-based biotechnology startup named Aspyrian Therapeutics. Then, in 2016, I was appointed Chairman and Director of the company and later became its CEO. In 2019, its name was officially changed to Rakuten Medical, Inc. The idea was born out of my drive to find a treatment for my father’s cancer, and the company now works at the forefront of cancer technology with Rakuten Medical’s Illuminox — an investigational treatment platform based on an innovative cancer therapy called photoimmunotherapy. As a result of determination and a partnership with pioneering healthcare experts in Japan, the US and beyond, a world of patients may soon have access to therapeutics developed on this platform.
Today, Rakuten Medical, Inc. is a global biotechnology company developing precision, cell-targeting investigational therapies on its Illuminox technology platform which pre-clinical studies have shown to induce rapid and selective cell killing and tumor necrosis. Note that Illuminox therapies have not yet been approved as safe or effective by any regulatory authority. Rakuten Medical is committed to its mission to conquer cancer and aims to create a society where cancer patients can lead fulfilling lives.
Motoyuki Li, President and CEO, NTT DOCOMO Inc.
NTT DOCOMO Inc is Japan’s leading mobile phone operator, and with its 79 million customers, it is one of the largest in the world. From its founding in 1991, it has been on the forefront of mobile communications. Of the several technologies it has pioneered, the company will be ever iconic for creating the Emoji – its original set of of emojis from 1999 was even displayed at New York’s Museum of Modern Art. Now, the company is looking to pave the way for another mobile revolution, accelerated by the urgent need for digital transformation during the coronavirus pandemic and fueled by its homecoming to parent company NTT, which recently purchased the shares of the company it did not own in one of Japan’s largest corporate buyouts. Here, the company’s new CEO and President and former Chief Digital Officer, explains what’s in store for the company.
You have been with NTT Corp since 1983, and have held several different roles before becoming the President and CEO of NTT DOCOMO in December 2020. From your wide-ranging experience, please describe the corporation’s traditional strengths and competitive advantages.
NTT DOCOMO started its business before there was even a market for mobile communications, and as a pioneer of the mobile communication services, the company has always challenged itself to bring new things and establish new markets. “To create new worlds through challenge” is the strength and the DNA of NTT DOCOMO.
We have created a data communications and mobile content market through the introduction of i-mode. A team of employees able to come up with a new world view and a corporate environment enabling this creative impulse is our company’s biggest advantage. By attracting many customers who have sympathized with our activities and have used our products and services, we have been able to obtain a majority share in the Japanese market.
Going forward, we will continue to take action to shift toward new businesses such as mobile payment and our d point club membership business. By doing this, we will continue to create a new world view and deliver new value to our customers, while simultaneously gaining new customers to grow our business.
As the new CEO, what are the main goals that you have set for the company?
By becoming a wholly-owned subsidiary of NTT, NTT DOCOMO will become the contact point for all NTT’s clients, representing the whole NTT Group and offering a wide range of services and solutions for not only mobile, but for fixed-line, and cloud networks as well. It will take up the mission to expand our business beyond the mobile world to deliver new values by offering a “total service.” To do so, we will strengthen our collaboration with NTT Communications Corporation and NTT COMWARE Corporation, and other NTT group companies.
“We will aim to deliver advanced network and strengthen competitiveness on pricing by developing a network that combines mobile and fixed-line networks, which would lead to realizing user-friendly services and inexpensive billing plans.”
We have five major goals in our business and activities, which are separated into five branches: communications, Smart Life, corporate, global and R&D. In our communications business, we will aim to deliver advanced network and strengthen competitiveness on pricing by developing a network that combines mobile and fixed-line networks, which would lead to realizing user-friendly services and inexpensive billing plans. For our Smart Life and corporate business lines, we will strengthen our ability to create new services and solutions and expand our business domain by fully utilizing the assets of the NTT group. In global business, we will deliver our Smart Life services and solutions, which we have already started to offer in Japan, to the global market. Lastly, in R&D we aim to lead the world by accelerating our studies to realize next-generation networks such as 6G and IOWN.
We have also strengthened our management structure to achieve these goals, and assigned senior executive vice presidents to each business goal. They will be responsible for achieving the goal and supervising its activities, earnings and expenses. We believe this will also help to clarify the strategy and direction to strengthen each activity.
“We aim to lead the world by accelerating our studies to realize next-generation networks such as 6G and IOWN.”
By the summer of 2021, NTT Communications and NTT COMWARE will become a wholly-owned subsidiary of NTT DOCOMO, and we will strengthen our collaboration with the R&D department of NTT to promote the development of 6G and IOWN. And from spring through summer of 2022, we are planning to strengthen our communications and corporate business by reshuffling the business functions of NTT DOCOMO, NTT Communications, and NTT COMWARE.
We are aiming for a synergy effect to grow our profit, while also streamlining cost and capital investment by accelerating our collaboration with the aforementioned group companies. The actual outlook is still under consideration and will be announced at an appropriate time.
Actual synergies will probably include the expansion of corporate business by combining NTT Communications’ strength and reach in terms of large companies and NTT DOCOMO’s nationwide network of business units. There is also a possibility of creating new services by combining the network and upper-layer applications seamlessly, such as services based on mobile and fixed-line merged network and cloud services.
By taking these steps, I wish to lead the company to make major changes in our society. This will be possible by opening up the way to the future by innovating and delivering high-quality, next-generation services and solutions swiftly to the market. These solutions will be discovered by quickly sensing the needs of our customers.
You are steering the company through very interesting times. You are undergoing one of Japan’s largest buyouts, with NTT completing the tender offer to buy the 34% of NTT DOCOMO stock that it did not own. How could it transform the company, and could it open new opportunities for US investors or partnerships?
NTT DOCOMO will become a centerpiece of NTT Group and, as the contact point for all customers, it will meet the diversifying customer needs in whole.
The action taken to become a wholly-owned subsidiary of NTT has great meaning, as it will enable a fast and precise realization of our goals through smooth cooperation and integrated operations with other NTT group companies. We’ll be able to use the resources and assets of the NTT group both strategically and flexibly, while avoiding the risks of having conflict of interests with minority shareholders or having to cope with the limitations to secure company independence.
We will deliver our Smart Life services, especially our payment platform business which has a strong advantage in Japan, not only to the US, but to the global market. We would also like to globally deliver network technologies and solutions fit for the 5G IoT (internet of things) era by utilizing the business units and assets of the NTT Group. To do so, we will actively utilize human resources from other NTT Group companies who are familiar with global business, to support corporate customers with business in the US and elsewhere.
Also, from the R&D perspective, to become one of the world’s leading companies of mobile communications, we are planning to strengthen our ties with the R&D department of NTT to work on next-generation communication technologies such as 6G and IOWN, global standardization for next-generation service infrastructure technologies, and application and delivery of these technologies on products and services offered globally.
According to a recent corporate WSJ survey sponsored by NTT, 77% of global corporations have seen their strategies impacted by the COVID-19 pandemic. What impact has the pandemic had on NTT DOCOMO’s strategy?
In April 2020, when the State of Emergency was declared in Japan, we saw a decrease in the number of customers visiting DOCOMO shops, a decrease in the sales of handsets, and a decrease in profits from international roaming services since there are far fewer inbound and outbound travelers.
After the State of Emergency was lifted, we saw sales of handsets recover to average levels, but the effects from the decrease in the number of inbound and outbound travelers still exists and we still see a yearly decrease in the profits from international roaming services. We expect to see some effects in the sales of handsets and services, as well as in network construction, if the effects from COVID-19 last for a long period of time.
To minimize the effects of the pandemic, we are shifting the ordinary reception services of the DOCOMO shops to the web and promoting digital transformation so businesses with call centers and network operation centers can work remotely. Also, we have worked to minimize the risk of infection for all employees of the company. And so far, during the third wave that started in January, we have been able to keep the effects of the pandemic at a minimum.
“With the whole society shifting towards doing everything remotely even after the pandemic, we have been taking action to promote our customers’ digital transformations.”
With the whole society shifting towards doing everything remotely even after the pandemic, we have been taking action to promote our customers’ digital transformations. Some of the activities include support for remote activities utilizing telework and 5G technologies, promoting the GIGA SCHOOL initiative, which enables high-speed internet access in schools and providing a PC for every student in elementary and junior high schools, and delivering new solutions to support digital transformation in small and medium businesses. From this April, we will start to offer the business d-account service, which will enable corporate users to easily access our business solutions. By strengthening our ties with NTT Communications, we would be able to accelerate the digital transformation movement by enhancing our ability to offer value-added services including mobile, fixed-line and upper-layer services.
We see this change in environment as an opportunity, and we will aim to contribute to the creation of new value and solving social problems, while also growing our business.
DOCOMO is present in the United States, offering a wide range of communications services although the solutions are particularly aimed at enterprises. How do you envision DOCOMO’s future in the US?
NTT DOCOMO is currently providing solutions mainly focused on IoT to corporate users in the US through our subsidiary, NTT DOCOMO USA, Inc. We will continue to expand our global business in terms of 5G and IoT networks and solutions by utilizing the NTT group’s assets in North America and other locations abroad.
Additionally, if we have the opportunity, we would like to deliver the capacities that we’ve acquired in the BtoC Smart Life business, such as the payment platform business to the global market – US included.
For the next generation 6G and IOWN networks, we are partnering with leading companies in the US such as AT&T, Verizon Wireless, Qualcomm, NVIDIA, Intel, VMware and Dell Technologies, to promote the activities of the O-RAN alliance, which was formed by telecommunication operators and manufacturers to drive embedded intelligence and new levels of openness in the radio access network of 5G, and next generation wireless systems.
We will continue to utilize our world-leading technical advantages and support the growth of our customers doing business in the US market.
In March, DOCOMO launched 5G services in much of Japan. How has the rollout been going?
The number of 5G subscriptions has risen to 1.85 million by February 4 and is growing as planned. To expand to the majority base of our subscribers, we will continue to deliver a full lineup of devices, including iPhones and other standard smartphones, and offer billing plans fit to our users’ lifestyles, such as the Ahamo billing plan for digital natives and the 5G Gigaho Premier billing plan for unlimited usage. We will also work continuously to offer high-quality networks and high-value services. We aim to swiftly reach around 2.5 million subscribers by March 2021, and 20 million by March 2024.
We will also work to expand the 5G area coverage using 3 frequency bands with broad bandwidth, which was made newly operational to realize the high-speed communication necessary for 5G. The installation of the base stations is going smoothly as planned, and we will aim to install base stations in 500 cities including all government-designated cities by the end of March 2021. Going forward, we aim to install 20,000 base stations by the end of March 2022, and 32,000 base stations by the end of March 2023.
This plan is based on using the new frequency bands made operational for 5G, and we will aim to have around 70% population coverage with high-speed, large-capacity communication capabilities by the end of March 2023.
What opportunities do you see for collaboration with the US around 5G?
Supplier selection of 5G infrastructure will be based on the proposal from suppliers in Japan, the US and abroad, and will be fairly decided based not only on pricing, but also on the quality, delivery schedule, and the guarantee of a stable supply. We are also closely collaborating with US companies to create new value for 5G services. With Qualcomm, we are studying the possibility of developing new low-power consuming chips for attractive handsets that are suitable for NTT DOCOMO’s 5G services. And we are also studying a collaboration to offer secured networks to deliver cloud solutions on 5G by utilizing Amazon AWS and Microsoft Azure services. We will continue to contribute to the creation of new value and solving social problems and aim to grow our business even more through collaboration with US companies.
What are your thoughts on Japan’s vision for Society 5.0 and how NTT DOCOMO can play a role in the digital transformation of society?
We have been strongly promoting activities to solve social problems through business. We believe that by utilizing our advanced technologies such as 5G, IoT, and AI, and by working with various partners, we would be able to offer high-value solutions that would solve social problems, which would lead to the realization of Society 5.0.
With the new society nearing, where almost everything could be done remotely after the COVID pandemic, we would like to contribute to creating new value and solving social problems by promoting digital transformation, offering remote work and remote communication tools on 5G.
One of Japan’s shorter-term goals is to set up a Digital Agency this year to accelerate the digital transformation of government processes. What role do you see for private sector companies such as DOCOMO in this process?
We are already making efforts to accelerate the government’s actions to digitally transform its processes. At the moment, we’re contributing to the digital transformation of the Japanese government by offering RPA automated services, and total support on mobile networks and infrastructures, handsets, and applications needed for streamlining processes, which are all essential for digital transformation.
Going forward, we will continue to study ways to accelerate the digital transformation movement by enhancing our ability to offer value-added services including mobile, fixed-line and upper-layer services, which we believe would contribute to bringing the initiatives of the Japanese government to fruition.
Shingo Mizuno, Corporate Executive Officer/ Vice Head of System Platform Business, Fujitsu
Fujitsu is one of the world’s top IT services providers. On the cutting-edge of the technologies set to define the 21st century, Fujitsu is behind breakthroughs like the world’s fastest supercomputer, advanced artificial intelligence and leading 5G technology. Fujitsu’s goal to harness technology to create a more inclusive and sustainable future has clearly taken root, with the company being ranked as one of Fortune’s ‘Most Admired Companies’ and recognized by Dow Jones as one of the world’s leading socially responsible companies. Here, Shingo Mizuno, one of the company’s top experts in next-generation technology, discusses how 5G is paving the way for new business models and digital transformations that have the potential to enhance areas like health, security and sustainability.
In March 2020, Fujitsu launched Japan’s first commercial private 5G network in the Shin-Kawasaki Technology Square office. With this move, it hopes to boost the building’s security and deliver business innovation. What are the results and impact of the network so far?
Fujitsu is currently evaluating ways to achieve more sophisticated monitoring of human behavior, leveraging high-definition video for security purposes over the private 5G network at Shin-Kawasaki. For example, Fujitsu is evaluating the practicality of a system that detects and alerts to possible intrusions into sensitive or dangerous areas in the facility, as well as a system for visualizing and tracing crowding levels and whether people in the facility are wearing masks. The technology we’re testing enables a camera to act as a sensor. Instead of having different sensors for different purposes, it allows a single camera to be flexible enough to monitor multiple applications and add additional functions.
These sort of novel use cases were not quite practical with previous network capabilities, and they represent new ways we can make use of networks with improved performance. By making use of private 5G to create real-time digital twins in the workplace, we can provide all kinds of feedback in real-time, which will lead to business innovation for Fujitsu itself and its customers.
What are the advantages of opening a private 5G network over connecting to a public one?
Public 5G, which is provided by telecom carriers, benefits the general public through innovations in mobility and the optimization of society through the digitization of an entire city or geographic region covered by the network. On the other hand, private 5G enables companies and local governments to provide services tailored to their own needs within their own facilities and municipalities. Private 5G networks offer the flexibility to meet the specific service requirements of individual customers and areas where coverage with public 5G networks isn’t feasible or desirable. Having said that, there are some cases where private 5G services and solutions are provided across different locations, in which case there will also be a need to coordinate or link with public 5G networks.
Fujitsu also has plans to launch a private 5G network at the Oyama factory, which serves as a manufacturing base for network equipment. How could private 5G networks specifically benefit the manufacturing sector?
Implementation of the private 5G network at our Oyama factory is scheduled for March 2021.
Private 5G network performance, which allows for high capacity and low latency communications, as well as multiple simultaneous connections, will enable automation of transport and inspection operations and remote operations support in the manufacturing industry. By introducing this to our operations, we hope to contribute to solving various issues faced by the manufacturing industry such as cost reduction and quality maintenance for the further enhancement of competitiveness, elimination of future labor shortages and passing on specialized skills.
Do you also offer private 5G networks in the United States?
While leveraging the private network scheme known as CBRS (Citizen Broadband Radio Service), we hope to provide our value by making use of an ecosystem that includes alliances with other companies, focusing on our strengths in areas like wireless and optical transmission technologies.
Fujitsu’s open, integrated 5G network solutions are offered in the American market. In basic terms, what does that mean?
Fujitsu’s offerings of open, integrated 5G network solutions are centered on radio base station components that support RAN (Radio Access Network), which is based on specifications promoted by the industry organization O-RAN Alliance. Our solution doesn’t consist solely of Fujitsu products but can be combined with other products that comply with the O-RAN Alliance specifications to create an optimal RAN. Fujitsu’s product line is particularly competitive in radio units (RU), which provide low-cost multi-band solutions.
In the future, we would like to have some activities to promote open architecture like Mobile Integration and Testing Centers, including in North America, to create an environment that enables verification of multi-vendor integrated RAN connections.
“We believe that 5G represents the vital network infrastructure underlying efforts to make digital transformation a reality.”
For an average person, it seems like we are already sufficiently connected with 4G technology. What opportunities will 5G technology open to typical internet users?
I agree that the advantages of using 5G technology for the internet on personal mobile devices like smartphones are somewhat limited. That being said, I think that the use of 5G technologies in the mobility field and the combination of devices such as high-definition cameras with various types of services in different industries will create exciting opportunities for regular users to experience convenient new services like unstaffed stores and more. Ultimately, the transition from 4G to 5G will be a continuous process—for many that means there won’t be many major apparent, visible changes. Rather, we believe that 5G technologies will emerge seamlessly and steadily with the evolution of digital transformation.
“I’m confident that the use of such 5G and data across industries will eliminate boundaries among different industries and create entirely new business models.”
And how do you think 5G will change business?
5G offers the potential to accelerate the digitization of field operations, solve various social problems, and transform customer operations. By connecting everything in real-time, 5G optimizes data processing models that leverage the cloud and edge computing. I’m confident that the use of such data across industries will eliminate boundaries among different industries and create entirely new business models.
In the United States, there have been major concerns over Chinese involvement in 5G networks. Do you think this opens the market for Japanese and Fujitsu technology?
We believe that the policies first implemented under the previous US administration, including generous support to small and medium-sized carriers and excluding products of sensitive origin, as well as policies to promote the adoption of Open RAN, offer significant market opportunities not only for Fujitsu and Japanese vendors, but also for many new vendors.
Japan is a steadfast ally of the United States, and Fujitsu is a key player supporting Japan’s information and communications technologies. We have established a system to design and manufacture products mainly in Japan in a manner expected by policymakers in Japan and the United States. Furthermore, Fujitsu has developed business as a trusted partner of many governments at different levels across the world, and we take pride in the high standard of security we offer for these technologies.
How do you think 5G or even 6G will help facilitate Japan’s digital transformation both in the short term and in the longer-term vision of Society 5.0?
5G technology enables a society in which people, goods and services are connected in real-time, and when combined with other technologies, it offers the potential to accelerate the digitization of Japan’s industry and social infrastructure. As 5G helps to resolve various issues confronting society, new challenges arise, and at the same time expectations for networks emerge.
6G will evolve to meet these expectations, and I think that it will ultimately become possible to create an even more advanced, data-driven society.
Is there any other message you would like to share about 5G or your company with the US audience?
Fujitsu has the leading-edge technologies to deliver on the promise of digital transformation and provides a wide range of solutions and services including network products. We believe that 5G represents the vital network infrastructure underlying efforts to make digital transformation a reality. In order to create this open 5G ecosystem, we look forward to working with a variety of partners to deliver different products and solutions and system integration services to help contribute to the realization of North America’s 5G networks.
Fujitsu has recently teamed up with the city of Dublin, Ohio to pilot a smart city powered by 5G technology. Do you have any comments or updates on the success of that project?
You’re referring to the pilot trials to help realize the smart city concept in Dublin, Ohio, called “Connected Dublin.” Fujitsu installed a system to test and operate CBRS-compliant smart parking systems. By measuring and analyzing parking conditions and visualizing them to the local community, we aimed to revitalize local businesses and reduce CO2 emissions by shortening driving times. It also turned out that the technology we piloted there could be used to measure the effects of quarantine guidelines for COVID-19.
At present, we are working on the verification trial within the standardization group and considering the practical application of the technology in the city. We are also working with the City of Dublin on a feasibility study. We are proceeding with preliminary confirmations to design infrastructure that can flexibly respond to the various citizen service improvements being planned by the city.
Do you hope to see this smart-city concept expanded to other US cities?
Carrying out digital transformation has become an urgent challenge not only for local governments but for all industries. We believe that as large amounts of data, large numbers of devices, and real-time performance become more sought after, autonomous, flexible, next-generation networks that leverage 5G’s superior performance will become indispensable.
Within this, the concept of the smart city for local governments helps them pursue the Sustainable Development Goals. I believe that many local governments will aim for digitization and the use of 5G and other network technologies to achieve these goals.