Company history

Comsys was created to serve a single buyer. Postwar Japan wanted its telephone network rebuilt faster than the state could manage alone, and the argument that private capital and labour should take over the construction work produced, in December 1951, a company assembled for exactly that purpose: Nippon Tsushin Kensetsu, capitalised at $83,333 (¥30m), floated by twenty-one figures from business and the trade with Ishizaka Taizo as their representative. The following year Nippon Telegraph and Telephone Public Corporation was established, and in August 1952 the new firm was certified as a comprehensive grade-1 contractor in cable, equipment and radio transmission. That certificate was the business. NTT awarded work only to designated contractors it had graded itself, so entry was effectively closed — and the company's order book was set not by selling but by the state monopoly's investment plan.

The plan grew enormously. NTT's successive five-year programmes lifted construction spending from ¥293.5bn in the first to ¥3.52tn in the fourth, and Comsys's orders from the corporation rose from ¥4.48bn in fiscal 1961 to ¥10.77bn in 1965. But its share of the corporation's total awards never left the 13.2–14.2% band. Growth came from the customer, in the customer's proportion. When the company listed on the Tokyo Stock Exchange's second section in July 1962 — and the first section in 1972 — its largest shareholders were the cable and equipment makers that supplied the materials for the work: Sumitomo Electric, Furukawa Electric, Fujikura, NEC, Toshiba, Oki, Hitachi, Fujitsu.

By the December 1978 term the arithmetic of the arrangement was fully visible: 97.2% of completed work came from the public corporation, 1.5% from other domestic clients and 1.3% from overseas. Sales rose from ¥24.1bn in 1975 to ¥76.4bn in 1981 and ordinary profit from ¥800m to ¥3.3bn. Nothing in thirty years had required the company to find a second customer, and nothing about it suggested one was coming.

In August 1982 the company took its first fibre-optic cable contract, in a term when sales fell to ¥74.5bn and ordinary profit to ¥2.1bn. The job mattered for a reason that had nothing to do with its size. Under a grading system that decided what a contractor could bid for by what it had already built, taking the first site of a new method was a way of buying the right to the next decade's work before that work existed.

The customer then changed shape. NTT was privatised in April 1985, three long-distance rivals entered the following June, and through the 1980s the former monopoly moved from spreading fixed-line and mobile construction across several contractors to awarding each to one — a change that forced the contractors themselves to consolidate. The company renamed itself Nippon Comsys in 1990, gained NTT's new comprehensive certification in 1991, and by fiscal 1996 was booking more than ¥200bn in both orders and completions, posting record profits two years running as the reshuffle handed it share.

Then the source dried up. NTT group capital spending peaked at ¥3.09tn in the year to March 1999 and fell for a decade. In fiscal 2003 the NTT group still accounted for $1.2B (¥135bn) of Nippon Comsys's ¥249bn in sales — 54.1%. In September 2003 Nippon Comsys, Sanwa Elec and Higashi-Nippon System Kensetsu executed a share transfer to create Comsys Holdings, listed on the first sections of the Tokyo and Osaka exchanges. The three were not merged; they survived intact beneath a new pure holding company. Its first president, Shimada Hirofumi, said plainly that NTT work was continuous, stable and attractive, and that he had no intention of reducing it.

For the first seven years the structure was used only on itself. Businesses were shifted between the three subsidiaries — NTT engineering work concentrated into Nippon Comsys, carrier business moved out to the renamed Sanwa Comsys Engineering in 2005, shared services separated in 2007, software development carved out in 2009. Sales rose from ¥248.9bn in the first year to ¥307.5bn in fiscal 2005, then slid back to ¥293.0bn by fiscal 2009. No outside company had yet been acquired.

The first came in October 2010: Tsuken, of Hokkaido, taken by share exchange. It brought about a tenth of group revenue and pushed consolidated headcount past 10,000, and it demonstrated the mechanism — take a regional contractor whole, keep its corporate personality, then rationalise inside it. Five Tsuken affiliates were folded into the parent in 2013, consolidating Hokkaido into one legal entity, and group operating margin climbed from 4.3% in fiscal 2011 to 8.3% in fiscal 2013.

The same mechanism was then aimed away from telecoms: solar power (Japan Eco System, 2014), road paving (Tokyo Hoso Kogyo, 2016), gas installation and steel fabrication (Kando and Fujiki Tekko, 2017). That social-systems segment grew from ¥35.2bn in fiscal 2012 to ¥99.2bn in fiscal 2017 — 11% of sales to 26% — while NTT work stayed flat. Finally, over two weeks in spring 2018, ten telecom contractors announced integrations at once, in combinations matching joint ventures formed two years earlier. In October Comsys took NDS of Nagoya, SYSKEN of Kumamoto and Hokuriku Telecom Construction of Kanazawa by share exchange, adding 5,119 employees in a year and completing a nationwide construction footprint. Consolidated sales went from ¥380bn to ¥481.7bn; because the purchase price fell below book value, the deal booked $46.7M (¥5bn) of negative goodwill as an extraordinary gain.

The 2019 medium-term plan, NEXT STAGE 2023, set targets of ¥600bn in sales, ¥50bn in operating profit and a 70% total return ratio. The 5G base-station build-out delivered the first part: sales of ¥560.8bn, ¥563.2bn and ¥589.0bn across fiscal 2019–21, with a record ¥42.9bn operating profit in fiscal 2021. Then mobile capex was cut, and fiscal 2022 gave back ¥25.8bn of sales and ¥10.8bn of profit at a stroke — operating margin from 7.3% to 5.7%. Recovery followed: ¥571.1bn, then a record ¥614.6bn in fiscal 2024, then ¥630.6bn with ¥50.9bn of operating profit in fiscal 2025, clearing both plan targets.

What had changed underneath was the mix. In fiscal 2024 NTT facilities work was ¥236.6bn, or 38.5% of sales — sixteen points below the 54.1% that had prompted the holding company in the first place. Social systems (¥211.4bn) and IT solutions (¥124.8bn) together came to ¥336.2bn, 54.7% of revenue. Seventy years after being founded to serve one buyer, the company earned the majority of its money from clients that were not telecom carriers.

The dependence was diluted rather than escaped, and the underlying market is closing. Fibre reached 99.7% of Japanese households by the end of fiscal 2021 and is projected at 99.9% by fiscal 2027; there is little new fibre left to lay, and the medium-term work identified is the removal of the networks being retired. NTT facilities revenue peaked at ¥250.4bn in fiscal 2019 and has not returned. Tanabe Hiroshi became the group's fourth president in June 2024, inheriting a company whose sales had grown 2.5-fold since 2003 largely by acquiring the businesses its original customer could not supply.