au/KDDI Fiasco Restores Bureaucracy Grip of Japan’sTelecom Industry

TOKYO, July 4, 2022—Some people in Japan are grinning with hope about the 2-day telecommunications disruption fiasco of au/KDDI, the country’s second largest carrier, as the impact of the worst communication outage continues to reverberate on individual phones and corporate telecom systems July 4.

They are the ones whose predecessors suffered bitterly under the American occupation force’s order to dissolve Kokusai Denshin Denwa (KDD) Co. and saw its business transferred to the former Japan Post and Telecommunications Ministry in 1947. The business in 1953 was moved from the ministry to KDD/Kokusai Denshin Denwa Co., but in 1979-1980, bouts of bribery scandals involving the company’s payoff to Japan Post bureaucrats surfaced, resulting in arrest of company executives and bureaucrats. In part because of the scandals, KDD was put under joint management of Toyota Motor Corp. and the Japan Post mutual aid association, the ministry’s governmental pension. In 2000, stakeholders of the telecom reorganized into KDDI. Kyocera Corp. holds 14.54 percent; and Toyota 13.75 percent. 

Management changes, however, did not alter KDDI’s corporate culture of ‘respecting’ the bureaucracy and handle customers like government officials do, alias, treat them with bureaucracy’s pompous attitude and avoid responsibility. At a July 3 midday news conference, CEO Makoto Takahashi spoke about the outage as if it was a rival telecom’s problem, hardly registering sympathy for users.

It’s a corporate culture that blends smoothly with the bureaucracy, so it was not a coincidence that government officials have lost little time in saying that KDDI needs to be put under 24/7 government watch to prevent the recurrence. ‘It’s a timely opportunity’ for bureaucrats, especially for those at the newly-founded Digital Agency that Japanese media taunted as struggling to find work.

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