NTT Flexing Overseas Muscles

Nippon Telegraph and Telephone Corp. (NTT - Analyst Report), the largest integrated telecom operator of Japan, is gradually establishing its strong foothold in the overseas markets. Recently, the company declared that its revenue from overseas operations will reach at least $131 million in 2012. Near saturation of the Japanese telecom segment has forced Nippon to explore foreign markets in order to maintain growth. Management is hopeful that by 2013, the company will offer a worldwide cloud computing network to its clients.

Nippon has taken a major strategic move to boost cloud computing and its integrated communications services business. The company acquired South Africa-based leading global IT solutions firm, Dimension Data. Further, Nippon is integrating the Dimension Data business with its NTT Communications division, which offers IP VPN, data center, and network security services to several large and geographically diversified business enterprises. Dimension Data is concentrated mainly on the West Coast of the U.S., Latin America, Western Europe, Africa, the Middle East, Australia, and the Indian subcontinent. On the other side, NTT Communications has a solid presence in South-East Asia, Central & Eastern Europe, and East Coast of the U.S.

Dimension Data has over 6,000 customers in 49 countries, whereas NTT Communications has more than 3,000 global customers throughout the world. We believe the merged entity will become an international giant offering virtually a complete suite of integrated communications and IT services to any enterprise in any part of the world. Acquisition of Dimension Data will provide Nippon with the necessary scale and technology to formidably compete with other giant cloud computing firms.

Nippon’s wireless wing NTT DoCoMo (DCM - Analyst Report) started pursuing global ambitions long back in 2009. NTT DoCoMo entered into a significant international business agreement through which the company purchased 26% stake of Tata Communications Ltd. (TCL - Snapshot Report), the sixth largest telecom service operator in India, in May 2009. This partnership agreement gave the company a strong foothold in the second largest emerging market of the world.

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