Motorola to gain access to Japan's cellular market

March 12, 1994|By New York Times News Service

TOKYO -- Motorola Inc. and a Japanese company have reached a basic agreement that will expand Motorola's access to Japan's cellular telephone market, a Motorola official said yesterday.

The agreement with Nippon Idou Tsushin Corp. is likely to avert threatened sanctions by the United States against Japan by removing one dispute between the countries. But the cellular telephone issue is separate from a broader disagreement over the comprehensive trade talks that broke down last month.

Government and industry officials from both nations said they expected a formal announcement early next week, though it could come as soon as today.

Timothy Kellogg, a Motorola spokesman, said the talks would resume today in Tokyo. He declined to characterize the outstanding points of discussion but did not dispute reports that the main unsettled business was what the Japanese government would do to guarantee the arrangements between the companies.

The negotiations headed toward their finale during a visit here by Secretary of State Warren M. Christopher, who sharply criticized Japan for not honoring its trade commitments.

The United States has accused Japan of violating a 1989 trade agreement that called for Motorola to be given "comparable" access to the cellular market in the heavily populated Tokyo-Nagoya corridor.

One Japanese trade official said, "If an agreement is made, certainly that will have a good impact on the overall environment."

But another noted that the cellular phone issue had "very little to do with the current situation," referring to the broader dispute about whether there should be numerical targets to judge progress in opening Japan's markets.

The mobile phone issue came to the fore just after the trade talks collapsed at a meeting between President Clinton and Prime Minister Morihiro Hosokawa of Japan. Washington took advantage of the issue to get tough with Japan, saying it would publish by March 17 a list of Japanese products that could be subject to retaliatory tariffs.

The root of the dispute is that IDO, which provides cellular service in the Tokyo-Nagoya region, has not invested much in building base stations for a system using Motorola technology. Instead, it expanded a cellular system using technology developed by Nippon Telegraph and Telephone Corp.

The United States and Motorola have demanded that the Japanese government guarantee that IDO will fulfill its obligations under the agreement. Japan has maintained that IDO's behavior is a private matter that is out of the government's reach.

Under the new agreement, IDO is to invest heavily to build 159 new base stations for the Motorola system over 18 months. That would give the Motorola system almost complete coverage of the Tokyo-Nagoya region, making it much more attractive to potential customers.

IDO will also transfer 1.5 megahertz of radio frequencies from the NTT-based system to the Motorola system, meaning there will be more capacity to add channels for the Motorola system and less capacity for the NTT system to expand. After the agreement takes effect, IDO will devote 6.5 megahertz to each system.

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