Company history

Modern NTT begins not as a company but as an arm of the state. In August 1952 the telegraph-and-telephone operations of the Ministry of Communications were hived off into the Nippon Telegraph and Telephone Public Corporation (日本電信電話公社), a public enterprise charged with wiring the entire country. Over the next two decades it did exactly that — driving telephone service to near-universal coverage by the 1970s at a single, nationwide flat rate — a feat of engineering performed inside the rigid frame of a public corporation, where prices, disclosures and the very scope of the business were fixed by statute rather than by management.

By the early 1980s that rigidity had become the problem. Pressure built to open Japan’s telecommunications to competition and to free the corporation from public-sector constraints, and in December 1984 the Diet passed the three telecommunications-reform laws. On 1 April 1985 the public corporation was privatized and reborn as a joint-stock company, Nippon Telegraph and Telephone Corporation — the largest privatization in postwar Japan. The same reform threw the market open: new carriers such as DDI (today KDDI) and Japan Telecom were licensed to compete, so the nationwide fixed-line network NTT had built as a monopoly now had to defend its value against rivals. How much of that monopoly-era scale would survive competition became the question underneath every decision that followed.

In February 1986 NTT listed on the Tokyo Stock Exchange, and the offering became a national event: shares sold at $7,103 (¥1m) apiece drew a wave of first-time retail investors, and NTT’s market capitalization briefly ranked among the largest in the world, helping to inflate the late-1980s bubble. Behind the spectacle sat a company that still controlled almost all of Japan’s fixed-line telephony — a private firm with a monopolist’s balance sheet.

But the growth was migrating away from that core almost as soon as the company went public. In July 1991 NTT carved its mobile business out into a separate subsidiary, NTT DoCoMo; built around the i-mode mobile-internet service launched in 1999, DoCoMo would grow into the single largest profit engine in the group. In 1992 the data-communications business was likewise spun off as NTT Data, creating a standalone systems-integration company. Within a decade the hierarchy had inverted: the fixed-line telephone business that had been NTT’s whole reason for being became the mature, shrinking core, while the two offshoots — mobile and IT services — rose to carry the group.

The decentralization was then written into law. Under a revision of the NTT Law, in July 1999 NTT reorganized into a holding-company structure, splitting regional telephony into NTT East and NTT West and placing long-distance and international service in the new NTT Communications. The regulators’ aim was to break the regional fixed-line monopoly and force competition; the lasting result was a group in which several members — DoCoMo and NTT Data among them — were themselves listed on the exchange, each with its own board, its own capital-market accountability and its own minority shareholders to answer to. The holding company’s every cross-group decision now sat in permanent tension with those minority interests — a structure that bought stability at the price of slow decisions and duplicated capital, and whose constraints would, twenty years on, become the reason to tear it all down again.

With the domestic network mature, the decentralized group pushed abroad — and it was the listed subsidiaries, not the parent, that led. NTT Communications’ purchase of the U.S. internet provider Verio ran straight into the dot-com collapse and a goodwill write-down. It was NTT Data that built the durable overseas platform, acquiring the South African IT firm Dimension Data for about $3.3B (¥286bn) in 2010 — then the group’s largest foreign deal, and the pivot on which NTT Data became a global IT-services company. That the group’s international vanguard was a listed subsidiary rather than the holding company itself was decentralization made visible; how to scale such deals while reconciling a listed unit’s independent funding with group-wide coherence would eventually light the fuse for full re-acquisition.

At home, growth was flattening on every front. Fixed-line telephony gave way to broadband, and NTT East and West pushed fibre-optic service hard; but once fibre penetration reached a certain level growth slowed, and the regional carriers’ revenue drifted into gentle decline. DoCoMo, which began selling the iPhone in 2013, fought to hold its ground, yet the rise of budget MVNO carriers and government-driven pressure to cut tariffs pushed mobile revenue-per-user steadily lower. Group results held broadly stable — in the year ended March 2018, $106.7B (¥11.78tn) in revenue and $8.1B (¥898bn) in net income — but the maturity of the domestic market was showing plainly in the numbers.

The answer to maturity, NTT decided, would be technological and audacious. In May 2019 it unveiled IOWN (Innovative Optical and Wireless Network), a plan to replace electronic signal-processing with light end to end — targeting, by 2030, roughly one-hundredth the power consumption, over a hundredfold the capacity and a fraction of the latency of today’s networks. For a company spending on the order of $1.8B (¥200bn) a year on research, IOWN became the flagship: a bet that a telecom carrier could design the core technology of the next network itself, spanning semiconductors, devices, software and data centres. But building it demanded exactly what the group did not have — cross-company investment authority and the freedom to keep the technology proprietary — while the NTT Law still obliged NTT to disclose its research results. The mismatch between IOWN’s requirements and the decentralized, legally constrained structure supplied the logic for everything NTT did next.

The undoing began with the crown jewel. In September 2020 NTT launched a tender offer for NTT DoCoMo and took it fully private for about $39.8B (¥4.25tn) — among the largest acquisitions ever by a Japanese company, and a deliberate reversal of the 1991 spin-off and 1998 listing. With DoCoMo delisted, NTT could at last run fixed-line and mobile as one business, optimizing everything from tariff plans to network investment across the group. The timing was also political: the Suga government was pressing carriers to cut mobile prices, and as long as DoCoMo answered to minority shareholders deep cuts were hard to justify — full ownership removed the constraint, and the low-cost ahamo plan followed.

Under Akira Shimada, who became president in June 2022, dismantling the legal cage became the priority. In April 2024 a revised NTT Law took effect: it scrapped the duty to disclose research results, eased limits on foreign executives and permitted NTT to change its trading name. At a stroke, keeping IOWN proprietary became lawful and NTT’s competitive footing improved. For the first time since privatization, a company that had only ever been able to manoeuvre within the rules moved to change the rules themselves — management now treated the law not as a backdrop to strategy but as the precondition it had to rewrite before strategy was even possible.

In May 2025 NTT completed the re-integration, taking NTT Data fully private for about $15.8B (¥2.37tn) and folding the group’s last major listed subsidiary back in — closing the decentralized chapter that had opened in 1999. Together the two buy-backs cost roughly $44.1B (¥6.6tn) and strained the balance sheet, but they turned a holding-company conglomerate back into something close to a single decision-making body: in the year ended March 2025 the group reported $91.6B (¥13.7tn) in revenue and, for the first time, net income above $6.7B (¥1tn). In July 2025 the company retired the formal name it had carried for forty years and became NTT, Inc. — the endpoint of Shimada’s push to be an ordinary joint-stock company, no longer defined by its state-monopoly past. What is left to settle is the NTT Law itself and the government’s roughly one-third stake — and whether the trillions spent on re-integration can be justified by the profit growth still to come.