Innovation strategy and technological competence building to provide next generation network and services through convergence – the case of NTT in Japan

Telecommunications industry has been through major structural changes in recent years due tothe Internet. Technological, economic, and social drivers have caused the telecommunicationsmarket to converge, with boundaries between diverging technologies, industries, and servicesbecoming blurred. In this paper, an analysis is made of the impact of the paradigm shift of nextgeneration network services on the R&D and technology strategies of Nippon telegraph andtelephone (NTT) in its transition to become a leader in the provision of services, integratingtechnological competences in application technologies with competences in the underlyingnetwork technologies. Changes in the R&D organisation and strategy were identified toenable NTT to shift its focus to the upper-layer businesses.