How long he will grow his beard, which already stretches two inches, will depend on two things: Whether the service wins government approval today and whether consumers want to send e- mail and browse Web pages on a telephone's liquid crystal display instead of a computer screen.
The so-called L-mode service is meant to repeat the success of sister company NTT DoCoMo Inc's mobile phone version, called i-mode, which took just six months to reach Sata's milestone. Rivals say NTT East and NTT West Corp, formed from the former telephone monopoly to focus on local services, should remain barred from Internet services, arguing it involves long-distance calls.
"L-mode will be very positive for NTT East and West because it means they will be involved in the Internet, not just phone services," said Hironobu Sawake, a senior analyst at ING Baring Securities (Japan) Ltd. "Still, I think what NTT's rivals are saying makes sense."
NTT Law
Under current laws, the local units of Nippon Telegraph & Telephone Corp are only allowed to offer services that operate within a single prefecture. Providers of long-distance services DDI Corp., Japan Telecom Co. and Cable & Wireless IDC Inc object to any encroachment by NTT East and West into their areas of business. Another NTT unit, NTT Communications Co, already leads the pack in long-distance call service.
NTT has said the service won't conflict with the law because it is Internet service providers that will move L-mode's Internet traffic across local borders, and not the NTT units. NTT East is planning to use two service providers to move L-mode Internet traffic.
The Ministry of Public Management, Home Affairs, Posts and Telecommunications is expected to make a decision today.
The service is modeled on DoCoMo's i-mode. Cellular phone users can now download cartoons, play games and find favorite restaurants on Web sites specially developed to be readable on tiny mobile phone screens.
The fixed-line version will boast similar offerings, focusing on mail and Web browsing with contents, geared to housewives, provided by outside companies. Sites offering information such as weather forecasts, news, and city and restaurant guides are in the works.
Shrinking Pool
Some analysts were skeptical that the L-mode service can attract users in significant numbers as the pool of people with no other Internet access is shrinking.
"I don't see a big market for this service," said Makio Inui, a telecommunications analyst at Nikko Salomon Smith Barney Ltd. "L-mode is a proxy allowing NTT East and West into the ISP market. That's why NTT wants it and the other telephone carriers don't want it."
The ratio of cellular phone subscriptions to Japan's population is now over 50 percent, and about half of those mobile phones are Internet-enabled. While personal computer ownership has been slower to grow here than in the US, about 35 percent of Japanese people now have PCs in their homes. As of December, about 40 million Japanese had home Internet access, according to the Nielsen/NetRatings Web site.
There are signs the government may be willing to cut the two local telephone companies some slack. The ministry is planning to submit a bill to the current parliament session to ease some restrictions on NTT and its wholly owned regional service units, which were created by government fiat on July 1, 1999.
In return, NTT would have to agree to more radical measures allowing competition in Japan's 16 trillion yen (US$132.69 billion) telecommunications market.
Meanwhile Sata is making other plans for his beard.
"I am hoping to shave my beard after Christmas so I can play Santa Claus first," he said.
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