JIN-188 -- Tokyo Developing in a Very Sept. 10th Way

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. 188
Wednesday, July 10, 2002


++ Viewpoint: Tokyo Developing in a Very Sept. 10th Way

++ Noteworthy News
- KDDI To Offer IP Phone Service
- Softbank's Son Says Gov't Pressuring Him on Aozora Share Sales
- SESC Monitors Web for Trading Fraud

++ Event (advertisement)

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++ VIEWPOINT: Tokyo Developing in a Very Sept. 10th Way

It was supposed to happen this way: Heightened security concerns after
the September 11 attacks in New York would combine with first-rate
technology that allows people to do their work just about anywhere to
end the age of the skyscraper. Low-slung corporate headquarters would
spring up in suburbs near the workers' homes, cutting commuting time
and increasing quality of life.

In fact, this is happening through much of the US, according to
professor William J. Mitchell, dean of MIT's school of architecture.
"Efficient telecommunications have diminished the importance of
centrality and correspondingly increased the attractiveness of less
expensive suburban sites that are more convenient to the labor force,"
he was quoted as saying.

Well, the esteemed professor obviously hasn't been to Tokyo recently.
Tokyo, the city that inspired Blade Runner, is developing in an oh-so
20th century way -- office buildings are getting bigger and taller and
those cramped little 2-story buildings are being laid to rest by the
bulldozer. Tokyo is going vertical in a big way.

A survey done by Mori Building earlier this year found that 2.18
million square meters of large-scale office space will become
available in 2003 -- the largest annual increase since the company
began taking the survey in 1986. And the Mori people are leading the
charge: The 54-story Roppongi Hills, which will have more than 370,000
square meters of floor space, is scheduled to open next spring.

President Minoru Mori wants Tokyo to grow vertically. He also told
J@pan Inc recently that the city needs more "Omote Sandos," which
implies less of the rickety back alleys found in spots like Shonben
Yokocho or Golden Gai in Shinjuku, that are only defended by
"Japanologists," according to Mori.

But Mori is not the only one trying to build Tokyo to the heavens.
Huge projects by Mitsubishi, Mitsui and Sumitomo are also under way.
This will create the office glut the Japanese media has written so
much about and most likely, the dumpy little office buildings found
throughout the city will be the ones to suffer. "The trend toward
large-scale buildings has become significant in recent years," the
Mori report says.

The trend toward concentrating these big office buildings in central
downtown has become significant as well. "Construction in the three
central wards (Chiyoda, Chuo and Minato) comprised only 40 percent of
the total... in 1994," the Mori report says. "However, construction in
this area will comprise 75 percent of the total immediately before and
after the peak of 2003."

So, while the rest of the industrialized world experiments with
technology and frets over security issues, Tokyo will look more and
more like a city of the 20th century, with workers centralized in
large state-of-the-art buildings. The age of the skyscraper is not
dead; it has just moved to Tokyo.

-- Bruce Rutledge


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** KDDI To Offer IP Phone Service

Extract: KDDI on Tuesday announced that it will start offering
corporate IP phone services on July 29, so it can start full IP
services by October. The company also has said that it will launch IP
phone services for individual ADSL users this coming fall.
The new corporate IP service will be delivered for KDDI's fast
Internet connection users. KDDI will charge 8.5 yen per three minutes
(2.8 yen per minute) for domestic calls, and 10 yen per minute for
calls to the US. It will charge an additional 2,000 yen as a basic
monthly fee and 4,000 yen for a rental adapter.

Commentary: KDDI, Japan's second largest telecom company after NTT,
is finally entering the new battle zone for the IP phone market.
Yahoo! Japan already offers BB Phone service for 2.5 yen per
minute for both domestic and international calls to the US.

Source: http://www.kddi.com/release/2002/0709-1/index2.html
"2.5 Yen a Minute to Call the US Doesn't Sound Too Bad" from the J@pan
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** Softbank's Son Says Gov't Pressuring Him on Aozora Share Sales

Extract: SoftBank's CEO Masayoshi Son last week criticized the
government for pressuring him on the sale of Softbank's shares in
Aozora Bank (former Nihon Credit Trust Bank). Softbank owns about 50
percent of Aozora Bank, which it bought from the government when the
bank was nationalized due to its insolvency, and it's planning to sell
some of its shares. US buyout fund Cerberus already has shares in the
bank and is thought to be one of the possible buyers. But the Japanese
monetary authorities have said that they would rather that Softbank
not sell to a foreign interest. In a press conference held in Tokyo
last week, Son said that the government has been pressuring him.

Commentary: As always, Son is fighting back. Let's face it: Softbank's
balance sheet is worsening and he needs to sell whatever he can. He
doesn't want the government to get in his way. Last month, there was
a lot of talk on this issue. The leading financial daily, the Nikkei
reported last month that Japan's Financial Services Agency (FSA) does
not want buyout funds to become major shareholders in financial
institutions. According to the report, the FSA plans to limit major
shareholders (those who own more than 20 percent of shares) to
financial institutions that are committed to long-term management.

Meanwhile, the minister for financial services, Hakuo Yanagisawa,
commented last month that the possible sale of Aozora shares would
harm Son's reputation. Son was called to a lower house committee and
said that while he is considering the sale of Aozora shares, he
has yet to decide what to do.

Source: http://headlines.yahoo.co.jp/hl?a=20020704-00000595-jij-biz

Link: "Broadband Wars" from December 2001 issue of J@pan Inc

** SESC Monitors Web for Trading Fraud

Extract: The Securities and Exchange Surveillance Commission of Japan
is now monitoring the spread and effect of online stock rumors on the
Tokyo market. The system by Fujitsu has been in effect since April and
apparently keeps tabs on Web sites showing spikes in traffic. It was
established in an effort to curb stock fluctuations caused by
unsubstantiated rumors. Toyo Construction's 30-yen drop is cited as
one such example of unfounded rumors drastically affecting stock
prices. The SESC has yet to prosecute anyone based on this new system.


"A New Sheriff's in Town" from December 2001 issue of J@pan Inc

++ Event

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SUBSCRIBERS: 5,786 as of July 10, 2002

Written by Bruce Rutledge (bruce@japaninc.com)
Edited by J@pan Inc editors (editors@japaninc.com)


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