Facility supply and demand of the trunk line network: Some aspects of competition in the Japanese telecommunications market

This article reports that a significantly low figure is obtained in calculating the facility demand-supply ratio, or capacity utilization, of the Japanese trunk line network. It also notes NTT's overwhelming shares in both volume of services and transmission facilities as well as large scale economies in transmission technology associated with circuit multiplexing. Huge excess capacity, mainly in NTT, could potentially destabilize the long-distance market. Although competition has produced demonstrable results, these may not be enough to prevent persistent inefficiency in the incumbent's investment behaviour.