Section 4. New Business Enterprises
Item 3. Entry into the Communications Field
Investment in Teleway Japan Corporation, International Digital Communications Planning Inc., and IDO Corporation
As global liberalization of the telecommunications industry was taking place, Japan also reformed its telecommunications oversight in April 1985 to begin liberalizing the field. Since the early 1980s, TMC had been taking active steps toward entering this field with its Corporate Planning Department and Tokyo Branch Research Division jointly conducting investigations and evaluations. This policy was based not only on a strategy to expand business by entering a new business field, but also on an expectation that application of telecommunications technologies to cars and utilization of advanced telecommunications services within the Toyota Group would result in the synergistic effect of strengthening TMC's automotive business.
In the first half of the 1980s prior to liberalization, TMC had been asked by the Japanese government and financial circles to get involved in the telecommunications business. Chairman Eiji Toyoda was also serving as the chairman of the Telecommunications Council, which was the main advisory committee to Japan's then minister of posts and telecommunications, as well as chairman of various telecommunications organizations.
As the liberalization of the telecommunications industry began in 1985, TMC entered three new business areas, i.e., domestic long-distance communications, international communications, and mobile communications. Following its participation in a study evaluating commercialization of a project utilizing road infrastructure that was backed by the Ministry of Construction (now Ministry of Land, Infrastructure, Transport and Tourism), TMC established Teleway Japan Corporation (TWJ), a domestic long-distance carrier. jointly with three trading companies, including Mitsui & Co., Ltd., and the Japan Highway Service Association in November 1984. The company acquired an official business license in June 1985. In the domestic long-distance communications field, business permits were issued to the following three companies: DDI Corporation (DDI) backed by Kyocera Corporation, Japan Telecom, Ltd. backed by the Japan Railways Group, and TWJ backed by the Ministry of Construction.
In 1986, many companies began making moves to enter the international communications field. Invited by Itochu Corporation, TMC became one of the core investors in International Digital Communications Planning, Inc. (IDC).1
As for mobile communications, when Nippon Telegraph and Telephone Public Corporation (now NTT) began car telephone service in 1979, TMC provided assistance, such as that concerning technologies for installing related equipment in vehicles, and it was a field that TMC had been most hoping to enter. Many new entities backed by long-distance and regional communications companies began considering to enter the mobile communications field. As a result, TMC-backed TWJ and Kyocera-backed DDI ended up covering different service areas, and regional electric utility companies invested in one or the other of these telecommunications companies to participate in commercialization. In March 1987, TWJ, as the leading shareholder, and TMC, as the second-largest shareholder, established Nippon Ido Tsushin Corporation (IDO), a mobile phone service provider which began providing service in December 1988.
As it entered the three communications fields, TMC proceeded to enhance its internal organizations. For example, in February 1989, TMC reorganized related departments such as the Tokyo Branch Research Division and Engineering Division and established the Telecommunications Department using the Tokyo Office of the Corporate Planning Department as its parent. The Telecommunication Department was renamed the Telecommunications Division in August of the same year. This division was put in charge of not only TMC's involvement in three telecommunications business enterprises, but also of the entire communications and IT fields, including how to link communications and vehicles and other research related to the automotive business.