Japan's Computer and Communications Industry: The Evolution of Industrial Giants and Global Competitiveness

By Martin Fransman | Go to book overview

that will meet NTT's specifications, those vendors that have taken part in the joint development of ATM switches with NTT are at an obvious advantage, with NTT having paid the cost of prototype development and as a result of the learning they have undergone. The likely outcome, therefore, is that there will be 'small numbers competition' at the procurement stage. Certainly, the expectations of the suppliers participating in the ATM project is that they will more or less equally share NTT's procurement according to their own efforts, costs, and performance.


Implementation of ATM Switching

By October 1989, NTT had developed a fully fledged experimental ATM switching system. In October 1991, this ATM system was unveiled at the International Telecommunication Union's (ITU) Telecom 91 in Geneva. After gradually introducing ATM switching into its network, NTT's plan is to replace the current narrow-band digital network with a large-capacity broadband ATM trunk line network by around the year 2000.

In 1991, on the basis of research and development done inside their companies while participating in NTT's joint project, Fujitsu and NEC unveiled their own ATM switching systems. In 1991 Fujitsu became the first company in the world to offer commercially an ATM switching system for the high-speed, two-way transmission and routing of voice, video and data simultaneously. Fujitsu sold trial ATM switches to MCI ( AT&T's main competitor), and to four of the Regional Bell Operating Companies, including BellSouth and Nynex. NEC also sold its trial ATM switch in the USA. Both companies announced that their US facilities would manufacture and support their ATM switches sold to American customers. In this way, they hoped to avoid their earlier weakness when they were unsuccessful in entering the US market in the early 1980s with their first digital switches.


Conclusion

This chapter has analysed the co-evolution of technologies, companies, and national innovation systems in the context of telecommunications switching. The technologies are the four main generations of switching technology that have emerged since the Second World War: electromechanical crossbar switches, space-division switches, digital time-division switches, and asynchronous transfer mode (ATM) switches. The companies included both those that entered the 1990s as winners--e.g. AT&T, Alcatel, Ericsson, Northern Telecom, Siemens, NEC, and Fujitsu--and those that dropped out, including ITT, Philips and GTE.

While most attention has been paid to the evolution of the Japanese Innovation System in telecommunications, and in particular to the evolution of its

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