JIN-194 -- Koizumi Picks Dealmaker from Shipping World to Run

J@pan Inc Magazine Presents:
T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business and Technology News

Issue No. 194
Wednesday, August 28, 2002


++ Viewpoint: Koizumi Picks Dealmaker from Shipping World to Run
Postal Services

++ Noteworthy News
- Son痴 BB Technologies to Sue eAccess CTO
- KDDI Handsets Go to the Movies
- Japan to Form First Graduate School for Doctors

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++ Viewpoint: Koizumi Picks Dealmaker from Shipping World to Run
Postal Services

In the boardroom of Mitsui OSK Lines, Japan痴 second biggest shipping
line, the conversation can frequently slip into a gruff Osaka dialect.
Several of the line痴 key executives say they値l always consider Osaka
home, even though their headquarters is in Tokyo. Now, if Prime Minister
Junichiro Koizumi has his way, Mitsui OSK chief Masaharu Ikuta will
bring the Osaka way of doing business to Japan痴 postal services.

Ikuta finally accepted Koizumi痴 offer to run postal services late Monday.
Postal services will be run by a public corporation from next April as
part of Koizumi痴 drive to eventually privatize those services. Ikuta had
turned down the premier痴 request once before, saying he knows nothing of
the postal business, but he met with Koizumi on Monday and agreed to take
the post.

Ikuta is straightforward, personable and fluent in English in the way much
of his generation is ・that is, with a pretty heavy accent. He can tell a
joke, has a good sense of humor and even has a flair for the outrageous or
incendiary comment. During a Japan-US trade dispute in the mid 1990s when
the US government was charging Japanese container ships extra to dock at
American ports, Ikuta made page one news in a shipping journal when he
said Nestor Cerpa, the man then holding hostages in the Japanese embassy
in Peru, was more principled than the US government. He laughed when he
said it, perhaps knowing he壇 be reading his comment later.

He痴 savvy and internationally minded, but he痴 also known as a shrewd
dealmaker in an industry rife with collusion and obvious price cartels.
Shipping executives in the Asia region are famous for having informal
meetings on golf courses or in closed meeting rooms and setting prices
wherever they can. Ikuta is very much part of that world, so when he says,
的 will apply private sector management techniques to run the
corporation,・we can only assume he means those private sector techniques
he痴 learned by working several decades for a Japanese shipping line.

Ikuta is called 途eform minded・by the Nikkei, which is like calling
Donald Trump 都ensitive to the poor.・Ikuta is a good businessman -- he
presided over the successful integration of Navix Lines into the MOL
family in 1999 -- but MOL is no radical model of reform. It痴 a
conservative, successful shipping line that knows when and when not to
rock the boat.

So, for those of you who are worried about postal services being hurt by
too much competition, rest easy. If Ikuta runs it like a shipping line,
we値l have plenty more secret meetings where all the little problems of
pricing can be quietly worked out.

-- Bruce Rutledge

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** Son痴 BB Technologies to Sue eAccess CTO

In Brief: Masayoshi Son is irate over comments allegedly made by
eAccess chief technical officer Yoshihiro Obata about ADSL services
offered by Son痴 BB Technologies. In fact, his company is planning
legal action against Obata, news reports say.

The brouhaha boils down to Obata痴 alleged comments that BB
Technologies・ADSL services may cause communications problems when
users connect to services from other ADSL providers. Obata also
allegedly said that BB Technologies・ADSL services may not be fast enough.

Commentary: Son has had a rough August with the exit of Nasdaq from
Japan. But ADSL has been the key to his crumbling empire for some time,
and if Obata really did make these comments, Son is smart to try to stem
the rumors quickly. He can稚 afford much more damage. By singling out
Obata, Son has put eAccess on the spot. Does it fight back and protect
its CTO, or let poor Obata fend for himself against a very pissed off Son?

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** KDDI Handsets Go to the Movies

In Brief: KDDI is out to get its share of the burgeoning market for
cellphone handsets offering video. It unveiled four handsets on Monday,
one of which offers movie mail services. The A5301T handset from Toshiba
can record video at about eight frames per second and can show video with
sound for 15 seconds. The model goes on sale on September 20.

Commentary: KDDI is Japan痴 leader in 3G phones at the moment and it has
set itself a pretty lofty target of having 7 million 3G subscribers by the
end of March. The company said it had 2 million subscribers as of last
Friday. The new movie service will probably give J-Phone a run for its
money ・ J-Phone has sold more than half a million subscriptions to its
Movie Shamail service since March and is the industry leader despite
running its service on 2G technology. Movie Shamail runs video for five
seconds, just one-third as long as KDDI痴 newest offering. But 15 seconds
of video does not translate into 5 million new subscribers, even in Japan.
KDDI痴 target of 7 million subscribers by March reeks of the same sort of
hubris DoCoMo showed as it geared up for 3G. And DoCoMo has signed up only
about 120,000 to its 3G services so far.

From Reuters

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** Japan to Form First Graduate School for Doctors

In Brief: The Japanese government has decided to open the nation痴 first
medical graduate school in 2004. Five medical institutions are getting
together to carve out a request for funds in the fiscal 2004 budget to
create the school. It would allow doctors and other medical personnel to
study regenerative medicine, new technologies, medical policies and
medical treatment with advanced information network systems in 3- or
4-year courses, according to the Nikkei.

Commentary: This is a start, but Japan痴 medical sector could use a whole
lot more opening up. Japan痴 insistence on coverage for all is noble and
the right way to go, but too little attention to the higher end of medical
services and not enough attention to the abuses of the present system have
led to some serious defects.

Nikkei Net (password protected)

For more on the medical sector in Japan, check out our September
2002 issue featuring Kameda Medical Center in Chiba. It痴 in
bookstores now and online at the password protected links below.

鼎radle to Grave ・Your Life on a Chip・

笛apan痴 Medical Revolutionary・

SUBSCRIBERS: 6,070 as of August 28, 2002

Written and edited by J@pan Inc staff (editors@japaninc.com)


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