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Japan's NTT, PictureTel Expand Business Alliance

Responding to a rapidly growing demand among Japanese enterprises for IP (Internet protocol)-based visual collaboration solutions, Nippon Telegraph and Telephone Corporation (NTT) and U.S.-based PictureTel Corporation have announced a significant expansion of their four-year-old business alliance.

PictureTel will work with a newly formed NTT-affiliate, NTT-ME (Multimedia Engineering), to develop localized, IP-based conferencing systems that can operate over office local/wide area networks and corporate extranets.

The new collaboration/conferencing solutions will combine PictureTel's image and voice processing technologies with NTT-ME's leading-edge telecommunications technologies, in particular its XePhion ultra-high-speed extranet services.

"By continuing our work together, we will leverage each company's strengths and expertise," said PictureTel chairman and CEO Bruce Bond, "to provide customers with integrated service offerings that meet the expanding IP-based visual collaboration requirements for the Japanese market and other worldwide customers."

The NTT-PictureTel relationship dates from 1995, when the two firms began collaborating to develop ISDN-based a desktop videoconferencing systems for the Japanese business market. That collaboration led to the March 1996 release by NTT of its Windows 95-based Phoenix series of multimedia conferencing systems. To date, NTT has shipped more than 50,000 Phoenix terminals.

NTT and PictureTel took their collaboration a step further in April 1997 by creating NTT Phoenix Communications Network, a Japan-based joint venture specializing in multi-point videoconferencing services.

NTT-ME was established this month (April 1) as a 100% NTT subsidiary. It was created, in advance of the government-mandated breakup of NTT later this year, by consolidating NTT Telecom Engineering (NTT-TE) with parent NTT's Multimedia Business department and Research department.

Both NTT-ME and PictureTel have high expectations for the new stage of the partnership.

"This tie-up [offers us] the opportunity to make a large contribution to creation of an IP-based visual collaboration culture," said president Shigeru Ikeda of NTT-ME. "If the previous stages of the cooperative relationship can be considered a hop and a step, this one is a jump."

"Expanding the partnership will offer significant revenue and business opportunities in the coming years, and will enable us to collaborate on solutions that enhance high-quality IP-based visual collaboration worldwide," said PictureTel CEO Bond.

Naomi Tomita, president of PictureTel Japan, emphasized the global scope of the partnership's ambitions.

"This expanded tie-up is being made with an eye not only on Japan," he said, "but also on the world market."

PictureTel, the world leader in videoconferencing systems, brings to the partnership a wide range of products and services.

NTT-ME will supply its XePhion next-generation IP extranet technologies, which are currently being used by some two dozen Japanese firms, including Nomura Securities and Pasona.

NTT-ME and PictureTel will cooperatively develop the new products and services, which are expected to be available from this autumn with line speeds ranging from 128 kilobits to 15 megabits per second.

Each will work with its respective Japanese channel partners for marketing and distribution.

PictureTel says this new phase of the partnership will enable it to enhance the functionality and features of its value-added services to better support customer needs for IP-based visual collaboration.

It will allow NTT-ME to offer a total solution package of integrated videoconferencing consultation, equipment sales and installation, maintenance, and network operations management.