Wada, Norio 1940–
President and chief executive officer, Nippon Telegraph and Telephone Corporation
Born: August 16, 1940, in Japan.
Education: Kyoto University, BS, 1964.
Career: Nippon Telegraph and Telephone Public Corporation, 1964–1985, series of management positions; Nippon Telegraph and Telephone Corporation, 1985–1992, series of management positions; 1992–1996, senior vice president and general manager of Tohoku Regional Communications Sector; 1996–1997, executive vice president and senior executive manager of Affiliated Business Development Headquarters; 1997–1998, executive vice president and senior executive manager of Affiliated Business Development Headquarters; 1998–1998, executive vice president, senior executive manager of Affiliated Business Development Headquarters, and executive manager of NTT Holding Organizational Office; 1999, executive vice president and senior executive manager of NTT Holding Organizational Headquarters; 1999–2002, senior executive vice president; 2002–, president and chief executive officer.
Address: Nippon Telegraph and Telephone Corporation, 3-1, Otemachi 2-chome, Chiyoda-ku, Tokyo 100-8116, Japan; http://www.ntt.com/index-e.html.
■ After almost four decades as an employee of Nippon Telegraph and Telephone Corporation (NTT), in mid-2002 Norio Wada took over leadership of Japan's telecommunications giant as president and chief executive officer (CEO). Wada, who had previously served as senior executive vice president of NTT, was propelled into office in the wake of a shattering loss of nearly $6.3 billion, the biggest in the company's history. Although Wada's predecessor, Junichiro Miyazu, attributed the huge loss for fiscal year 2001 to the worldwide economic downturn, he stepped down in favor of Wada to pave the way for a fresh start at NTT.
Under Wada's direction NTT came roaring back. Earnings of the world's largest telecommunications company recovered in fiscal year 2002, reaching roughly $1.95 billion, and in fiscal year 2003 hit $5.6 billion, the company's best showing in history. Making the fiscal year 2003 performance all the more remarkable was the fact that profits nearly tripled on a revenue increase of only 1.6 percent.
BEGAN AS A STATE-OWNED COMPANY
NTT, which was incorporated as a private company in 1985, started in 1952 as Nippon Telegraph and Telephone Public Corporation, a state-owned company. Although the Japanese government retained a 46 percent stake in the company, its stock was publicly traded on both the Tokyo and New York stock exchanges. A holding company, not unlike American Telephone & Telegraph Company before its breakup, NTT controlled the operations of NTT East and NTT West, Japan's regional local telephone companies; long-distance carrier NTT Communications; and one of Japan's largest Internet service providers. NTT also owned a controlling share in DoCoMo, the leading Japanese cellular service provider.
Born on August 16, 1940, Wada studied economics at Kyoto University, from which he received his bachelor's degree in 1964. Shortly after graduation he went to work for Nippon Telegraph and Telephone Public Corporation. For the first three decades of his career, Wada moved through a series of junior-management positions with NTT. In June 1992 he broke into the ranks of senior management when he was named a senior vice president of NTT and general manager of the company's Tohoku Regional Communications Sector. Four years later Wada was named senior executive manager of NTT's Affiliated Business Development Headquarters. He continued as a senior vice president of NTT.
In June 1997 Wada was promoted to executive vice president of NTT, while retaining his position as senior executive manager of the company's Affiliated Business Development Headquarters. A year later he was given the added responsibility of executive manager of NTT Holding Organizational Office. In January 1999, while still executive vice president of NTT, Wada was promoted to senior executive manager of NTT Holding Organizational Office. In July 1999 he was appointed senior executive vice president of NTT, a position he held until June 2002 when he took over direction of the company as its president and CEO.
DEVELOPED STRUCTURAL REFORM PLAN
Even before he became CEO, Wada had been instrumental in developing a plan for the structural reform of the NTT's regional local telephone companies NTT East and NTT West. The primary goals of the reform plan were reductions in personnel costs, capital investment outlays, and other expenditures. To trim personnel costs the plan mandated adoption of a fundamental outsourcing strategy, reallocation of personnel within the group, and an accelerated program of voluntary retirements. As part of the new outsourcing strategy, activities such as order taking, equipment maintenance and operations, and repair work were moved to outsourcing companies, the staffs of which were supplemented by the addition of employees transferred from both NTT East and NTT West.
Shortly after his appointment as president and CEO, Wada told Kyodo World News Service that he planned to streamline the operations of all of NTT's group companies to eliminate the "wasteful" overlapping of businesses. He told reporters that he believed it was the duty of NTT, as the holding company, to control how businesses were distributed among its member operating companies. "A redistribution of business would be carried out under the existing framework of operating companies," Wada said. "How to do it would be a matter of discussion based on the nature of their businesses." Although Wada offered no examples of such overlap within the NTT family, analysts told Kyodo World News that the provision of Internet service, offered by several of NTT's group companies, might be a possible target for such streamlining (June 27, 2002).
Although Wada guided NTT back to profitability in his first year as CEO, he acknowledged in May 2003 that the turnaround in fiscal year 2002 had been accomplished largely through aggressive cost-cutting, including a reduction of 7 percent in the company's workforce from 223,500 to 207,400. NTT managed to post net income of roughly $1.95 billion although the company's total sales were down slightly from the previous year. Both of NTT's fixed-line regional local telephone companies, NTT East and NTT West, were in the black for fiscal 2002 but only because of sharp cuts in their operating costs. Wada said the fixed-line segment of NTT's overall business would continue to be a major challenge as more and more consumers turned to mobile phones and Internet telephone service. In announcing the company's results for fiscal 2002, according to an Associated Press report, Wada said: "We must completely change the content of our business in three to five years" (May 13, 2003). In an unusual collaboration, NTT joined with Hitachi and Mitsubishi Electric Corporation to successfully research and develop a new encryption technology. In late July 2003 the three companies announced they had succeeded in developing an implementation technology for an elliptic curve cryptosystem, which they dubbed CRESERC.
OUTLOOK GLOOMY FOR FIXED-LINE SECTOR
Even after announcing record-setting profits for fiscal year 2003, Wada made clear that the company's future would have to be built on its businesses outside the fixed-line telephone sector. Of NTT's three group companies in the fixed-line sector, two (NTT East and NTT West) managed to make money, but again only because of sharp reductions in their operating costs. NTT Communications, the company's fixed-line long-distance carrier, lost money in fiscal year 2003. A major factor in NTT's impressive showing for the year was a big jump in the earnings of DoCoMo, Japan's leading cellular operator in which NTT holds a 63 percent stake. To compensate for the shrinking business of its fixed-line companies, Wada shifted NTT's focus to video-communications technology and high-tech Internet services.
In early 2004 Wada denied that NTT planned to break directly into the television broadcasting business. Responding to reports in a Japanese newspaper that his company and Sky Perfect Communications were going to jointly launch a broadband television service as early as the summer of 2004, Wada said NTT's role would be limited to supplying technical support for such a service. "We will not enter the broadcasting industry," Wada told a press conference, according to Kyodo News International. "We have neither the capacity nor knowhow" (January 22, 2004).
In May 2004 Wada announced a change in strategy for NTT DoCoMo. He said that DoCoMo would henceforth focus on technological partnerships with other international mobile-phone operators rather than investing directly in such operations. In a telephone interview with Kyodo World News Service, Wada reported that DoCoMo's capital investments in AT&T Wireless Services of the United States and other mobile phone operators outside Japan had resulted in significant losses in fiscal 2003.
In March 2004 Wada was elected to a one-year term as chairman of Japan's Telecommunications Carriers Association, succeeding Satoshi Shirashi, president of PoweredCom. In addition to his responsibilities at NTT, Wada was active in a number of other professional organizations. He served as a member of the executive committee of the Japan-U.S. Business Council and also served as an expert consultant to the Japanese prime minister's Strategic Headquarters for the Promotion of an Advanced Information and Telecommunications Network Society. In March 2003 Wada was among seven Japanese business leaders named to become vice chairmen of Nippon Keidanren (Japan Business Federation), which was formed in May 2002 when Japan's Federation of Economic Organizations (Keidanren) merged with the Japan Federation of Employers Associations (Nikkeiren).
See also entry on Nippon Telegraph and Telephone Corporation in International Directory of Company Histories.
sources for further information
"Forbes Ranks Nissan's Ghosn Top Earner among CEOs in Japan," Kyodo World News Service, August 27, 2003.
"Japan Telecommunications Carriers' Association Picks Chairman," Knight Ridder/Tribune Business News, March 12, 2004.
"Japan Telecommunications Giant Denies Intent to Enter Broadcasting Directly," Kyodo News International, January 22, 2004.
"Japan Telescene," http://www.icr.co.jp/telescene/2002-22.html.
"Japan's Top Telecom NTT to Pick Vice President as Next President," Associated Press, April 16, 2002.
"Keidanren: Sony's Idei," Kyodo World News Service, February 25, 2003.
Kgeyama, Yuri, "Japanese Telecom Returns to Profitability," Associated Press, May 13, 2003.
"New NTT President Vows to Streamline NTT Group Business," Kyodo World News Service, June 27, 2002.
"NTT and Nippon Travel Agency Begin Joint Trials of 'World Wide Navi,'" http://www.ntt.co.jp/news/news04e/0401/040113.html.
"NTT DoCoMo Lists on New York Stock Exchange," http://www.nttdocomo.com/presscenter/pressreleases/press/pressrelease.html?param[no]=72.
"NTT DoCoMo to Shift Global Strategy to Technological Tieups," Kyodo World News Services, May 24, 2004.
"NTT Hits Record Profits on Booming DoCoMo Mobile Phone Business," Agence France Presse, May 14, 2004.
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"NTT Suffers Worst Ever Loss in Year to March, Targets Future Profit," Agence France Presse, May 14, 2002.
"Structural Reform of NTT East and NTT West," http://www.ntt.co.jp/news/news01e/0111/011122g_1.html.
"World's First Success! Three Leading Japanese Firms Jointly Develop a New Encryption Technology," http://www.ntt.co.jp/news/news03e/0307/030728.html.