Consumer electronics maker Sony is getting into the telecommunications business.
The company announced yesterday that it is applying for a licence from Japan's Ministry of Posts and Telecommunications to build a high-speed wireless access system to the Internet. The system will use IP (Internet protocol) technology to transmit data over a WLL (wireless local loop), according to Sony. Sony runs a large ISP (Internet service provider) business in Japan called So-Net.
A WLL is a local access system that connects users to a wireless telephone network. The wireless system would bypass Japan's relatively expensive "last-mile" wirelines that connect homes and businesses to the Internet.
Currently, those last mile connections are owned and operated by government-affiliated Nippon Telephone & Telegraph, Japan's largest telecommunications company. Japan's telecommunications market is in the midst of a massive deregulation, and a number of overseas companies have been ramping up their presence there, including US giants AT&T, British Telecommunications and MCI WorldCom.
Still, NTT's dominance in the market has been widely criticised for its contribution to the continuing high cost of telephone service and the low rate of Internet access in Japan.
Only 11 per cent of Japanese are online, according to IDC Japan, compared to the 35 per cent of Americans who are connected to the Internet and the 70 or 80 per cent of Scandinavians. Seiko Noda, Japan's minister for posts and telecommunications, earlier this month pointed to the high cost of access as a factor restraining Internet access in Japan.
Sony will invest around 10 billion yen ($125.7 million) in the project over the next three years, expects to have the system up and running in major urban centres by July of 2000.