Phone firm feels heat sparked by trade crisis

February 22, 1994|By New York Times News Service

TOKYO -- Depending on one's point of view, Takeo Tsukada is either the culprit responsible for an escalating trade crisis between the United States and Japan or an innocent bystander caught in the cross-fire.

Mr. Tsukada is president of the Nippon Idou Tsushin Corp., known as IDO, a provider of mobile telephone service that the U.S. government accuses of failing to provide adequate access to Japan's cellular phone market for equipment made by Motorola Inc.

Last week, the Clinton administration said it would impose sanctions on Japan for violating a 1989 trade agreement intended to open Japan's market to the American cellular technology.

In an interview, Mr. Tsukada lashed out at Motorola for making what he called selfish demands that threaten to drive his company to bankruptcy.

At the last minute, according to Mr. Tsukada, Motorola said sanctions could be avoided if IDO placed an immediate order for 225,000 Motorola portable telephones, which would have guaranteed Motorola 50 percent of IDO's anticipated customers. IDO, he said, rejected the request as being impossible to fulfill and against free consumer choice.

Mr. Tsukada also expressed surprise that the U.S. government would bring all its weight to bear in the service of one company. "It's a dirty, collusive relationship between the government and a private company," Mr. Tsukada said.

As Mr. Tsukada tells it, there is no plot to keep Motorola out. In 1987, Japan's government decided to allow one company in each market to compete in cellular telephone service with the Nippon Telegraph and Telephone Corp., Japan's main phone company.

IDO won the franchise for the heavily populated corridor from Tokyo to Nagoya. It decided to build its system using technology developed by NTT, Mr. Tsukada said, because the NTT technology already had a proven record in Japan. The DDI Corp., which won the franchise for the rest of Japan, chose Motorola's technology.

Still, the United States complained that the Motorola system was unfairly shut out of the lucrative corridor. In 1989, the trade accord was signed to open the Tokyo-Nagoya market to Motorola. Japan's government persuaded IDO to build a second system using Motorola technology.

IDO could not afford to build two systems, Mr. Tsukada said. So it put more emphasis on the NTT system, simply because it had started on the NTT system first and needed to build it up quickly so it could compete. The result is that today, IDO has about 310,000 customers for its NTT system and only about 10,000 for the Motorola system.

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