While Nippon Telegraph and Telephone Corporation (NTT) has been in the Australian market for several years, the company has recently found itself in the spotlight following a series of high profile acquisitions. ARN spoke to NTT’s Australian managing director and CEO, Yoshimasa Hashimoto, about its local plans.
How did you find yourself in the position of helming NTT Australia?
Yoshimasa Hashimoto (YH): I’ve been with NTT for more than 20 years now starting in 1988. NTT entered the global market in 1997, though there were still some limitations at the time. So the way NTT expanded outside of Japan was not through NTT itself but with group companies, which act as our affiliates. When NTT started its overseas business with subsidiaries back in 1997, I was assigned to grow that side of our operations. Since then I’ve been in the global business and in 1999 NTT officially entered the global market and I was a part for that for six or seven years. In 2004, I moved to NTT America in San Jose, California where I was responsible for our network business. In March last year, I moved again to Sydney where I took over the current position based on my experience in working in Western nations and dealing with the cultural differences.
What role does NTT play in Australia?
YH: When NTT originally established its presence here in 1997, we originally went in with the aim of supporting Japanese multinationals in the global market, which was common theme for affiliates back then. So we wanted to support their IT infrastructure and expand our coverage from a network perspective. About four or five years ago, we started to shift towards datacentre hosting and those types of services, so we acquired Verio in 2000. We had a transition period where we added Verio’s capabilities into our product offerings, so around 2004 we expanded the scope of our business to cover not only networking, but also datacentres. Through the acquisitions we’ve made, our business has grown not only with non-Japanese multinationals, but also with Australian multinational and government clients.
How different is the Australian market compared to the rest of the Asia-Pacific?
YH: It’s a pretty mature market, even though there are many global players here. Compared to the rest of APAC developing countries such as Vietnam, Thailand, Indonesia and Malaysia, have a bigger room-for-growth potential than Australia. Cloud is no longer a buzz word and more and more enterprise customers, service providers and governments will look at the benefits of cloud computing. The growth of the Australian market is not that big anymore, but the total volume of the market is much larger than any other APAC country.
NTT made some high profile acquisitions recently, such as Dimension Data late last year and Frontline Systems earlier this year. Why did NTT decide to make these acquisitions, and why now?
YH: We are moving towards becoming a global ICT Partner and no longer just a local player merely supporting domestic needs. Since we want to be a major global ICT partner, we need to target not just Japanese clients but also non-Japanese clients. The cloud era is coming and it requires networking capabilities, such as datacentres and infrastructure, professional skills and knowledge, expertise, etc. The international connectivity business is a very tough business and the major players are mainly competing on price. We’ve tried adding capacity as a way of growing business, but that didn’t really bring us large profits and so we decided to transform ourselves into an ICT player. We believe that the cloud era is coming, so it’s a good opportunity for us to grow our business in that area, not only in Australia but also worldwide.
These acquisitions have made industry insiders wonder whether NTT is keen to step into the Australian telco space. Is this something NTT is considering doing? Would you be willing to compete with Telstra?
YH: We’re not really expanding our domestic network infrastructure business in Australia. NBN is a big factor for that, so we will continue to work closely with our partners, including Telstra, Optus and NBN Co., so we don’t see ourselves competing with big telcos like those