Japan Likely To e-Business Boom

Tuesday, June 20th 2000, 12:00 am
By: News On 6

TOKYO (AP) — Japan's Internet business market is likely to boom over the next few years, according to government forecasts released Tuesday.

The online market for business-to-business commerce will grow to 103.4 trillion yen ($980 billion) in 2005, up from 14.43 trillion yen in 1999, the Post and Telecommunications Ministry said in its annual report on the communications industry.

Despite consumer concerns about privacy protection in Internet shopping, online commerce is likely to expand rapidly as connection fees drop and more people hook up to the Internet, the ministry said.

Last year, about 27.06 million people used the Internet in Japan. The number will grow to about 76.6 million by the end of 2005, the ministry predicted.

The online ``Internet-related business market'' was worth 6.40 trillion yen ($61 billion) in 1999, and will hit 31.25 trillion yen ($297 billion) in 2005, the Ministry said.

The market includes Internet connection services, Internet infrastructure related investment and peripheral business such as online advertising.

Nippon Telegraph and Telephone Corp., which currently offers connection through Integrated Services Digital Network for a monthly charge of 4,500 yen ($43) only in Tokyo and Osaka, plans to extend the service to other areas beginning July.

Japan has come under heavy pressure from U.S. trade officials to make it easier for foreigners to break into its lucrative telecoms industry, which is dominated by the Nippon Telegraph.

Japan's Parliament on May 12 passed a bill to reduce connection fees for leasing urban voice and Internet communications lines from NTT by 22.5 percent.

Still, that's far below the 50 percent demanded by Washington. U.S. officials say Internet access in Japan costs almost 10 times as much as in the United States.