Cisco, Net One in Japan Network Services Deal

Tokyo-based Net
One Systems Co. Ltd.
will set up a joint venture
with Cisco Systems Japan and
Mitsubishi Electric subsidiary Melcom
Service Co. Ltd.
to install and manage e-business networks.

The joint venture, Network Service And Technologies Co., Ltd. (NSAT), will
be formally established by the three partners on April 3. The new company
will begin its business operations sometime in May.

Net One Systems will hold a controlling 67 percent stake in NSAT, which is
to be capitalized at 100 million yen (US$952,000).

Melcom Service will own a 20 percent stake, while Cisco Systems Japan will
take an 8 percent share. The remaining 5 percent will be held by NSAT
directors.

Tooru Ishikawa, formerly a business communications systems division chief
with Lucent Technologies, will serve as NSAT president.

The rapid pace of e-business technologies has made it difficult for many
companies to keep up with the continuous investment required to upgrade
their network equipment and engineering staff expertise.

NSAT will promote its ability to respond swiftly to tomorrow’s evolving
business needs and market requirements, thereby enabling its clients to
utilize the latest technologies without the need for large investments in
equipment and expert personnel.

NSAT will offer three basic types of services: intranet and extranet design
and installation, virtual group networking, and 24-hour/365 days onsite and
remote network maintenance and management.

NSAT will launch operations with a staff of 65, and expects to expand to 100
employees within its first year of operation.

Net One Systems and Melcom Service, which together have more than 1,000
support personnel at 125 centers in 70 cities throughout Japan, will provide
support.

NSAT has set a first year sales target of 2 billion yen (US$19 million) —
three-quarters on consignment from Net One Systems and one-quarter from new
customers — rising to 10 billion yen (US$95.2 million) in fiscal 2004.

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