Special Feature: Vision for a New Optical Generation

Vision for a New Optical Generation–Broadband Leading to the World of Resonant Communication–

Norio Wada, President, NTT
Abstract
NTT has announced its vision for the full-scale broadband and ubiquitous era that will be brought about by optics in the next five years.
This paper introduces the “Vision for a New Optical Generation and
R&D Initiatives” presented by Norio Wada, President of NTT, at the“NTT R&D Forum2002 in Musashino” held in November 2002.

1. Introduction
NTT has regularly outlined its concepts for the
future, based on expected technological innovation,
as NTT Visions. It has undertaken basic research andfeasibility testing along the lines presented in thesevisions and provided new services as the fruits ofthese endeavors.
For example, in the INS Concept announced in
1979, NTT foresaw a departure from the telephonycentric society and carried out technical feasibility
testing and exploration of diverse uses of ISDN (Integrated Services Digital Network) to meet the expected diversifying needs of the coming advanced information society. These efforts culminated in 1988
when NTT started its INS Net service, the world’s
first ISDN service based on the international standards.
In 1990, with a view to promoting digital networks,
NTT announced its VI&P (Visual, Intelligent andPersonal) Concept aiming at enabling an advanced
global information society and accumulating a technology base through its comprehensive trials including broadband service trials using optical access technology and personal communication service trials
using wireless access technology.
In 1994, NTT put flesh on the VI&P Concept andannounced its Basic Concept for the Coming Multimedia Age to publicize the impact of the use of multimedia on the world. In line with this concept, NTT
conducted joint utilization tests of multimedia communication, aimed at exploring and creating new uses
6

and new application technologies.
Based on the results of these trials, NTT developed
and provided the OCN (Open Computer Network)
service, a forerunner of IP-based services. In 1998,
NTT put forward the Information Sharing Concept,
and has been exploring new application areas madepossible by the integration of technologies in different industries through the use of digital networks. In
the last few years in particular, NTT has been meeting market needs by developing and providing new
broadband services, such as FLET’S services (flatrate broadband Internet access services) and wide
LAN services, which are IP services for corporations.
Figure 1 shows how people’s expectations for IT
have changed over years. In the early 1990s, at about
the time when NTT announced its VI&P Concept, theuse of the Internet for commercial purposes began totake off in the U.S., and the first impacts were felt of
the wave of transition from telephony-centric communication to computer networking over the Internet.
From around 1995, just after NTT had announced
its Basic Concept for the Coming Multimedia Age,many corporations, generally known as “dot-coms”,
sprouted and tried to start new businesses using theInternet. At about the same time, investors began toregard the potential of IT with high expectations, andthese expectations peaked in 1999 when two newstock exchange markets, Mothers and Nasdaq Japan,
were established in Japan. After that, the inflated
expectations for IT shrank rapidly and the accumulated investment turned out to be excessive. As a result,many dot-com corporations were weeded out and
NTT Technical Review

1979
INS Concept

1998
Information Sharing
Concept

1990
VI&P Concept

2002

Vision for a New Optical Generation

Expectation

1994
Basic Concept for the coming
Multimedia age

IPO in Japan andEurope in 1999

IPO in USA
in 1997-98

Decline in investors’
motivation
stock price crashand culling out

Start of“.coms”

Telephony-centriccommunication

Decline incompanies’
motivation

Full-scale Broadband andUbiquitous Era

Internet(Web)
Dawn of Internet
technology

1975〜1980〜1985〜1990〜1995

Peaking of inflated
expectation

1997

Disillusionment

Educational
campaign

Stability

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Based on Gartner’s data

Fig. 1. Change in expectations for IT.

some large US telecom companies went bankrupt.
I perceive that we are now in the midst of a time ofdisillusionment with IT, but I also firmly believe thatthe activation of the market for the coming full-scalebroadband and ubiquitous era will soon begin.
2. Vision for a New Optical Generation
Taking these historical changes into consideration,
I will present the objectives and background behinddeveloping the “Vision for a New Optical Generation” under three main headings.
First, I will describe how we are now at an important threshold as the Internet experiences a large
wave of transition, from narrowband to broadband.
We have just entered what may be called the second
phase of the IT revolution. The mainstream services
in the new phase will be interactive communication
using video, with the logical conclusion that opticaltechnology, excelling in high-speed and broadband
capacity and offering permanent connection andinteractive communication capabilities, is the way togo.
Second, I will explain how various applications
based on interactive visual communication, which ispossible with optical technology, will conquer the“barriers of time and distance,” and enable global
sharing of “knowledge” and the conversion of“knowledge” into business. This can make people’sVol. 1 No. 1 Apr. 2003

lives safer and more fulfilling and strengthen the productivity and competitiveness of corporations. This
could also be one of the crucial factors in resolvingsocial issues in Japan today, such as the declining
birthrate coupled with an aging population, and environmental problems.
Third, I will present the NTT Group’s approach to
the New Optical Generation. We will press ahead
with R&D aimed at achieving a “resonant communication environment using optics” and will, as a corporation involved in the global information sharing
business, try to clarify our role and the direction of
our mission.
The phrase “resonant communication”, which I
used in the subtitle of my presentation, is the term wehave coined to mean the new-generation communication environment using optics, which will evolve inresonance with developments in the world and willallow people, corporations, and indeed any objects inthe world to be connected to anyone or anything, anytime and anywhere, ubiquitously through interactive
broadband networks. It will also feature secure, reliable, and simple communication with high usability.
3. Resonant communication environment
In the age of resonant communication, we hope toenable realistic and natural communication using
video and other modes of communication, which the7Special Feature

The first behavior model is the “multiplizing ofindividuals.” This is a term we have coined to meanthat one individual can simultaneously play multiple
roles. It is characterized by the following:• Visual “face-to-face” communication, allowing forrealistic exchanges between individuals;• Creation of a new breed of global communities thatspan regions and generations;• Participation of individuals, such as housewives andsenior citizens, in social and economic activities,
which enable the “knowledge” and “value” ownedby these individuals to take on business value.
narrowband environment previously could not handle and “conquer time and distance,” which is the true
mission of telecommunication (Fig. 2).
“Conquering time” will increase people’s “disposable time,” and “conquering distance” will phenomenally expand the range of activities of people and corporations. People and corporations will be increasingly able to share their disposable “knowledge” and“reality,” and business will progressively becomeborderless, not limited by country, region, industry, or
generation.
Consequently, individuals and corporations will beable to choose and combine the most suitable“knowledge” existing in the world. In other words,
they will be able to “co-create” their “knowledge.”
As a result, two types of new behavior models thatwill transform people’s lives and corporate activities
are expected to emerge.

Figure 3 shows the case of a stay-at-home housewife, who will now be able to make the most of her
time and knowledge as a business woman and mother.
Figure 4 shows an example of senior citizens participating in social activities. The husband in thismodel couple is a retiree, an ex-fine arts teacher at asenior high school in Miyazaki Prefecture. Theirson’s family lives in Tokyo. The husband is enrolled
in a virtual university in France and is studying thehistory of art over the net. He does not face a language barrier because automatic interpretation andtranslation are available. He also continues to paintand enters his works in virtual exhibitions. He teaches painting twice a week, for a fee, over the net topeople interested in painting living in different partsof Japan. His wife is good at local cookery and, at therequest of the members of a network community
formed by young housewives interested in cooking,Resonant communication environmentd ivityan nsitbd seBroadbandyof alit• high-speed and wide-band
br anged re• permanent connectionf• interactive
t o rch an
Monitoring
en intem
Corporationrefe
Individual Corporationnc
ns
Ubiquitous
Presentation
ha on tra• anytimeniCommerce
Information
E
at• anywhere
Informationmtransmissionor• with anyone/anythinginf
IndividualoaPrivate Individual Information
business
Collaboration
Information
searchCorporation
Corporation
Corporation
Information
eCRM
Video
communication
Video
Individual library Information Individual

Conquering
time anddistance

Increaseddisposable
time

What the resonant
communication
environment brings
Knowledge sharing

Reality sharing

Expansion

E

o
n
io
n
at
or
sio
rp
an
Co
xp

Safe, reliable,
simple andseamless usability

fb

ro

t
ec
bj e)
O hin
ac
(m
l
ua
nd
vid
ba
di
In
ad

End-to-end connectivity
corresponding
to user needs

Expandedrange ofactivity

Corporation
Community
Video on demandBusiness becoming
borderlessCo-creation ofknowledge

Information: Connection between elements

Fig. 2. Resonant communication environment.

8

NTT Technical Review

Special Feature

Features“Multiplizing of individuals”
Knowledge
sharing

Realistic exchange– Care support –– Work at home –Realistic exchange– Living away from family –Multiplizing ofindividuals!

• Visual “face-to-face” communication, allowing forrealistic exchanges between individuals• Creation of a new breed of global communities
that span regions and generations

Reality sharing– Monitoring –Day nursery• Participation of individuals, such as housewives
and senior citizens, in social and economic
activities, which enable the “knowledge” and“value” owned by these individuals to take onbusiness value.

ofConversion of resource Formation
community
value into business – Birdsof a feather –– English teaching –Fig. 3. Emerging new behavior models for individuals (“multiplizing of individuals”).

Professor lecturing
in art history at auniversity in France

Active use of
disposable time

Realitysharing

Learn art historyof the world in a
virtual university(automaticinterpretation)

Share a tablewith children or
grandchildren

Time with theirson’s family ona super widescreen monitor

Tokyo

FranceMedical consultation
with health monitoringdata that areautomaticallydelivered daily

Reality sharing
by visualface-to-facemeeting

MiyazakiConsult a doctor
about health“Knowledge”
sharing
between thegenerations

Wife good at
cooking local
dishesMember of foodcommunity

Teach homecooking

Teach oil painting

University hospital: Connection by resonant communication environment

Nationwide

Conversion of“knowledge”
into business

Nationwide

Fig. 4. Social participation model for senior people.

gives instruction about her recipes and shows her
actual cooking visually over the net. They not only
see their son’s family when they visit Miyazaki during the summer vacation, but also share some meal
times together using wide-screen displays to showeach other’s home. So, they communicate with eachother on a regular basis. Information on the health of
the senior couple is automatically sent to their home
doctor every day, and the couple and the doctor holda consultation session regularly using interactive
video communication.
The second behavior model has to do with businessactivity. The increase in the sharing of “knowledge”
and “reality” that exist globally and in borderlessVol. 1 No. 1 Apr. 2003

business will bring about what may be called a “Webchain” (Fig. 5). This is a chain linking the values ofthe diverse resources held by consumers and corporations. It will not only increase the productivity of corporate activities, but also give rise to new types ofservice and business model. Web-chains will:i) produce greater effectiveness and competitiveness as a result of changes in the businessprocesses (value chain) of corporations;ii) generate new business opportunities as virtual
corporations supported by SOHO-type management increase; andiii) create new global business models that span different industries.
9Special Feature

Features“Web-chain”
DesignStore
Web-chain[Community, etc.]
Monitor customer

Marketer(Work at home)

CustomercenterWeb-chain[Community, etc.]

Product
development

Designer

Strengthened customer
relations by face-to-faceinteraction

Material
company• Generation of new business opportunities
with the increase in virtual companies
supported by SOHO-type management

Manufacturing
Improved risk
management andincreased sense ofworking together
by monitoringproduction site

Emergence of
Web-chain!

Customer support

Factory• Increased effectiveness and competitivenessbrought on by changes in business processes(value chain) of corporations

Spread ofWeb- chain

Sales

capability
strengthened bycollaboration

Marketing
Product marketing
capability strengthened
by face-to-facecommunication

CustomerBusiness/sales
Increased attractiveness Storeof products andstrengthened
EC channel throughvisual expression

MaintenanceWeb-chain• Creation of new global business models thatspan different industries

Web-chain[EC, etc.]

CustomerSpread of Web-chain

Fig. 5. Emerging new behavior models for corporations (“Web-chain” of corporations).
Shortened lead time for product development process
Grand design by US
designer and engineering
planner, using 3-D images

Procurement andmanufacturing“Visibledevelopment”

Face-to-Face“Visible needs”

Development
and design
Collaboration
Lab

MarketresearchStore

DesignofficeProduct
development

Marketingand sales

Domestic andoverseas customers

3-D video

Spread of
Web-chain

Example of automobile
company

CG video
database

Designer“Visibletechnology”

Product
Producplanningtion
facilities
Product producer

Parts
company

Maintenanceand repair

DeliveryPrototyping and Collaboration
evaluation

Real-time

Meeting with globally
scattered labs to
Spread ofdiscuss adoption of
Web-chain
new technology

Evaluation“Visible
Physical procurement”
distributor
Factory(overseas)

Factory(domestic)“Visibleevaluation”

Collecting data about
customer needs whiledisplaying videos suchas a new car design
Spread of
Web-chain

Measurement

Professional
driverProduction briefing with factory staff using partsinformation such as design drawings, photos, and images

Fig. 6. High-efficiency model of business process in a corporation.

Figure 6 considers the example of an automobile
manufacturer to show how a corporation’s businessprocess can be made more efficient than it is today.
All the processes of developing a new car model,
processes that are said to take two years at present,from the conceptualization, design, prototype development, and evaluation, to final development of acommercial model, will be handled under the super10

vision of what is called a product producer. During
the planning process, specific conceptual designs canbe shown by video to customers and car dealers togather the information about the specific needs ofcustomers. During the design and development
process, contracted designers living in different partsof the world and design engineers and development
engineers in charge of new technology hold meetings
NTT Technical Review

Special Feature

Table 1. Applying the resonant communication environment for economic development.
Fields to contribute

Expected effects by applying the resonant
communication environment

Increasing industrial
competitiveness• Increasing industrial competitiveness through global collaboration between
a variety of corporations and people, which will cause innovation in valuechains, diversification in employment opportunities and creation of new
business opportunities.

Revitalizing theJapanese economy• Time, talent and capital that previously had not been utilized will bechanneled into economic activities.
• Boundaries between industries and between departments within a
corporation will be eliminated, and collaboration will increase between
individual parts of processes, individual employees, and individual pieces ofknowledge or technical know-how. Through such dynamic changes incorporate activity, new businesses will be created, whose impact on theJapanese market is expected to have reached about 64 trillion yen in theyear 2007.

Problems in the broadband Internet

Expectation for full-scale broadband
0

20

40

60

80

100%

0

20

40

60

80

100%

1.8
All (N=4727)

47.9

44.8

Current access method
Dial-up(N=766)

4.9

3.3
46.1

44.5

Prevention of andmeasures against network
abuse and misuse

88.6
93.8
87.6

Control of cyber-crimes

89.6

5.4
89.4

Strengthened network
security

90.6

0.8
FLET’S ISDN
(N=644)

51.4

42.5

4.8

1.8
ADSL+CATV(N=2901)

47.7

45.2

4.8

1.0
Optical fiber(N=96)
Expect a lot
Don’t expect much

44.8

47.9

Expect to a degree
No expectation

6.3

Not sure
Don’t know

90.5
Privacy protection

93.8

Protection of copyrightand other rights for
information originators

46.6
55.2

Making the informationand telecommunications
utilization environment
barrier-free

47.6
59.4
51.1

Emergency backup
systems

Miscellaneous

56.3
1.1
3.1

All (N=4727)
Optical fiber (N=96)
Sorce: Info Com Research, Inc.

Fig. 7. Results of questionnaire survey on broadband services (1).

using a visual database or mock-ups in 3D videos.
This will eliminate the traveling time for attending
meetings and lead to efficient product development.
During the production preparation phase, people inlaboratories scattered across the world hold virtualface-to-face meetings to discuss the application of
new technologies to the production of the new car
model. In this way, the resonant communication environment will allow the knowledge of the people
involved in product development to be shared globalVol. 1 No. 1 Apr. 2003

ly, resulting in a dramatic reduction in the lead time
for product development.
4. Applying the resonant communication
environment to resolve social issues
The resonant communication environment willbring considerable benefit to people’s lives and business activities and can be instrumental in solving alarge number of problems that Japan now faces.
11Special Feature

Broadband service five years from now
0

20

40

60

User requirements for utilization environment
80

100%

0

Simplicity

Communications

Videoconferencing
for telecommuting
Remote teaching forstudying at home
Interviews andauditions at home

Real-time
availability

Feature-length
film home theater
Home-based
live house
Electronic newspaperdeliveryFlexibility

Content withenhanced functions

Telecommuting
part-time jobs

Specialty channel
selection
Virtual secretary
Remote help desk

Learning at home

60

80 100%Easy-to-operateterminals using
voice input etc.
Accessing informationor services
with no trouble
Instantly available
information andservices whenever
you want themInstantly available
communication
whenever you want it
Using informationand services in amanner appropriate
for the time and place
Communication that
respects convenienceof all parties

Always safe living
environment

Living-room boutiques
Accessing informationand service in an
emergency

Living-room virtual tours
Widely available
Not widely available

Available to a degree
Not available

Not sure
Don’t know

Expect a lot
Don’t expect much

Expect to a degree
No expectation

Fig. 8. Results of questionnaire survey on broadband services (2).

Regarding the issue of declining birthrate coupledwith an aging population and employment, those who
could not previously participate in economic activities, such as senior citizens, housewives, and people
who could not move away from the area they live infor various reasons, will be able to participate fromhome. This will reduce the mismatch between labordemand and supply, secure a large working population, and revitalize the economy. (The population ofJapan is expected to peak in 2006 and then decline.)
Regarding environmental and energy issues, large
amounts of energy traditionally required for transportation will be saved, which will decrease the load
imposed on the environment. Eliminating the needfor physical proximity will also ameliorate the concentration of population in the Tokyo area.
The resonant communication environment is
expected to solve issues related to safety, peace ofmind, and security. The use of interactive video will
support the care of senior people, the use of various
sensors will improve the quality of preventative medicine and thus reduce insurance costs, and video monitoring will help prevent crime. The resonant communication environment is expected to rectify the dispar1240

Alwayscomfortable living
environment

Remote consulting
services

Security

Home-based
services

20

Connecting to the
Net from any typeofterminal

TV phone with family
members and friends

Not sure
Don’t know

Source: InfoCom Research, Inc.

ities in education levels between cities and rural areas
as well as diversifying educational opportunities.
5. Applying the resonant communication
environment for economic development
By increasing industrial competitiveness, propelling collaboration across industries, creating new
businesses, and so on the resonant communication
environment will have an impact on the Japanese
economy which is expected to have reached about 64
trillion yen per year by the year 2007 (Table 1).
6. NTT Group’s approach to the resonant
communication environment
Surveys about broadband services (Figs. 7 and 8),
based on questionnaires, reveal emerging needs forservices that take advantage of the full-scale broadband network using optics, such as realistic interactive communication, strong security and protection of
personal information, and superior usability withubiquitous availability. Figure 9 presents NTT’s basic
ideas for realizing a resonant communication enviNTT Technical Review

Special Feature

Resonant communication environment

Server-client typeEnd-to-end type

Developmentwith wide
latitude in two
directions

From now

Progress ofbroadband

Present★Advantage!

★Disadvantage!

• development led
by low cost
Internet age• Security and quality
concerns

Until now

Next 5-10 years

Delay and decline due
to disadvantages★Advantage!

★Disadvantage!

• Assured reliability
and quality
Telephony age• Difficult to meetever-diversifyinguser needs flexibly• High cost

Progress due to advantages
Autonomous anddistributed

Centralized andmanagedDelay and decline due
to disadvantages

Fig. 9. NTT Group’s approaches towards the resonant communications environment.
Conversion of “knowledge”
and “value” into business
Collaboration in product development

Video content delivery businessPrivate teacher
Designer

Corporate
LAN

Corporate
LAN

Other networks

Internet

Home LANInternet

Content

Internet

Corporate LAN

AccessUser management(authentication, status management etc.)

Other networks

Connectivity(end-to-end, broadcast, multi-point etc.)

GW

GW

Quality(speed, security, delay etc.)

GW

GW
Network platform

Other networks

GW

GW

End-to-end network
through real-timeconnection

Other
networks

Corporate LAN

Home LAN

OutdoorHome LAN

Remote field control

Home

Live distribution businessConversation between
grandmother and grandchildren

Viewing content ubiquitously
GW: gateway

Fig. 10. Conceptual network for the resonant communication environment.

ronment. Although the telephone network has beenhighly regarded as being reliable and of high quality,
it is expected to experience a decline due to its highcost and inability to adapt to diversifying user needs.
The Internet, on the other hand, has been expanding
Vol. 1 No. 1 Apr. 2003

due to its availability at low cost. However, as userneeds become more sophisticated, the issues regarding security, quality, and usability remain unsettled.
The survey results show that users want the properties of both the telephone network and the Internet in13

Special Feature

Authentication

Presence

Network platform

Core network

Sessioncontrol

Billing…

MobileIP

Security

Gateway Other
networks

・Large-capacity WDM technology
・Photonic router technology, etc.

・Priority/session control technology
・Security technology
・IPv6 technology, etc.

Optical network platform
Edge node

Optical access
Optical access

Optical accessEnterprisenetwork

DSL accessWireless
accessRegional LAN

Home network

Fig. 11. Conceptual network configuration for the resonant communication environment.

Databasebusiness

Marketingbusiness
Financial portal
business

Face-to-facesales

Onlinepublishingbusiness

Net gamebusiness

Image creator Travel EC
support business〔Service aggregation〕

Service provider

new
ating

Asset management
support businessCommunity
business

Image culturebusiness

e-learningbusiness
Movie
deliverybusiness

Solutionbusiness
Monitoringbusiness

Consulting
business
Remotenursing-carebusiness Preventive medicalcare business
Recyclingbusiness

Collaboration
business

ess

busin

Crea

〔Data mining〕

Cre

ting

Service provider〔Agent〕

new〔Matching〕

busi

ness

Service provider …

Service provider

Synergy through resonance with resonant communication environment
Resonant communication environment

Corporation
Goods
Individual

Individual

Individual

Individual

Platform service

Mobile communicationand other network services

Corporation

Corporation

Individual
Corporation
Group

charging, authentication, etc.

Corporation

Individual

End-to-end network service
connectivity, quality and reliability, security, etc.

IndividualGoods
Corporation

Fig. 12. Creating advanced business models.

broadband services. The resonant communication
environment is intended to satisfy all these demands.
7. Conceptual network in the resonant
communication environment
The resonant communication environment, as envisioned by the NTT Group, allows safe, reliable, and14

simple connection to anyone. It provides network services that enable information sharing, regardless of
the user environment (i.e., whether the user’s terminal is a personal computer, cellular phone, or home
information appliance, all of which will continue to
evolve) and whether a regional or wireless LAN is
used for access (Fig. 10).
To achieve these goals, in addition to the existing
NTT Technical Review

Special Feature

Table 2. R&D approaches.
Targeted areas

Approaches

Next-generation
network architecture(RENA)• Promote R&D on next-generation network architecture (RENA) thatwill be appropriate for interactive communications and quality control.
Security guarantees and the diversification in terminals and services
through “end-to-end” real-time connectivity.
• Take the initiative in optic-related technology and network service
control technology to increase network capacity and improve
economic viability while accelerating development throughcooperation and the utilization of partner technology.
(Resonant communication network architecture: RENA)

Fundamental upper
layer technology• Promote R&D on platform services that support diverse businesssolutions based on basic technologies, such as human interfaces,
agents, cryptography & security, and distributed databases.

Cutting-edge technologies• Promote R&D on cutting-edge technologies, looking 10 years ahead.

Vol. 1 No. 1 Apr. 2003

The NTT Group is actively exploring advanced
business models through the cultivation of demandfor optical network-based services, the provision of

Easy

The NTT Group will make the most of its existing
optical-fiber network infrastructure. We will enhance
it by applying our R&D results, such as high-capacity WDM technology, which increases both transmission capacity and distance, and GMPLS (Generalized
Multi-protocol Label Switching)-based photonic
router technology, which achieves high-speed datatransfer at the light-wave level. This will increase thecapacity of the existing network infrastructure andallow the construction of easily expandable and costeffective networks (Fig. 11).
We will offer highly usable end-to-end connectivity by equipping the network with a presence function,
which recognizes and manages a user’s communica-

9. Exploration of advanced business models

Gap between the R&D stage andcommercial introduction
Fund raising

8. Conceptual network configuration for the
resonant communication environmenttion environment; a session control function, whichinterconnects users; and an IPv6-technology-based
Mobile IP function, which enables ubiquitous communication. In addition, technology for per-connection priority control and session control, based oninterworking between the network and the user terminal, will make it possible to secure high speed,high quality, and high reliability from end to end,
including the user network. Furthermore, the use of a
dynamic secure channel to deter impersonation andprotect communicated information will enable securecommunication. This will lead to services that canmeet diverse user needs.

The Valleyof DeathHardhigh-speed, broadband, best-effort-based telecommunication (Internet) services, we will offer new services and capabilities (including advanced end-toend connection (real-time connectivity)) that are difficult to provide with the server/client communication model that the current Internet is based on; highly reliable network services with guaranteed quality
and security; and platform services, such as billing
and agent services, that support corporations andindividuals in creating new business opportunities.
Furthermore, we will study terminals that closelyinterwork with the network and examine new accessnetwork configurations that allow the flexible expansion of service areas and provide high-quality andhighly reliable services. In addition, we will provide
services that offer a selection of network functions
and a range of low and varied price plans.

Basic research

Development forcommercialization Launch in the market
Source: US Commerce Dept.

Fig. 13. The Valley of Death.

15Special Feature（Richer communication）（Beneficial to users, friendly to the environment）
NTT's businessNTT's businessNTT's business① Competitive edge
③ Deploy globally/④

・Application to socio-economic activities−Low birthrate, aging−Environment
・Contribution to advance of Japan's
science and technology② Explore new business fields

lead the market

The Valley of Death

Product development

R&D

Socio-economic activities

New business fields

Conventional business fields

BusinessCoretechnology
R&D strategy

Service concept

R&D

Human
contribution

Architecture

Fig. 14. Role of R&D that supports the resonant communication environment.

business solutions, and other initiatives. In parallel, it
is moving ahead with the creation of new services andnew business models through alliances with both
domestic and foreign business partners in various
fields (Fig. 12). Specific action plans include the following:• We will actively participate, from the early stages,
in research and development in policy making andfeasibility testing by the national and local governments, and we are pursuing solutions for social
problems.
• We will explore new solutions and business models
in cooperation with corporations in various industries.
• We will promote the global deployment of resonant
communication environments in cooperation with
the U.S., Europe, and Asian countries.
• We will undertake initiatives for the creation ofbusiness opportunities by supporting community
activities.
• We will provide new services, together with associated platforms, by combining digital broadcastingand optical technology in cooperation with thebroadcasting and other industries.
10. R&D initiatives
With the resonant communication environment inmind as a goal, the NTT Group is undertaking researchand development on the next-generation network
16

architecture, which is based on comprehensive software design from the upper layer functionality to theterminal, and in the fundamental technology requiredfor providing a wide range of services. In parallel, we
are actively pursuing cutting-edge basic technologies,
looking forward about ten years (Table 2).
11. NTT’s R&D endeavors
While it goes without saying that it is extremely
important to drive R&D towards realizing the resonant communication environment, it is also necessary
to innovate how we conduct R&D in order to be able
to cope with rapid technological innovation and swiftchanges in the market environment. Next, I discuss
how NTT pursues innovation in R&D to meet theneeds of the time.
12. Overcoming the “Valley of Death”
At the stage of development for commercialization
between basic research and market launch, it is often
hard to find financing from the market because thebusiness viability of new technology is difficult toassess. Fig. 13 draws on a publication by the US
Department of Commerce. The highlighted gap iscalled the Valley of Death in the U.S. To overcome
this gap and restore competitiveness, the US aims to
support R&D for commercialization and promotetechnical development projects. In Japan, the Council
NTT Technical Review

Special Feature

Needs ofNTT operating companies
Off-the-shelftechnology/productOff-the-shelftechnology/productOff-the-shelftechnology/productComprehensive producer function⁝

ResearchResearchResearch

Develop
core technology
Develop
core technology

・Commercialization throughalliances with relevant
industries
・・・・Applied R&D in NTT
operating companies

・Expert assessment
・Research/analysis ofDevelop formarket/technology trendcommercialization
Business・Marketing
LaunchDevelop for・Planning/proposal for development commercialization
・Market creation(meeting individual needs)

Market trends

Fig. 15. Overcoming “The Valley of Death” through the comprehensive producer function.

on Fiscal and Economic Policy has been discussing
the Valley of Death and considers it to be an important issue for the revitalization of the Japanese economy. I perceive that, in NTT, R&D activities for creating new technology do not always progress inaccordance with the activities of operating companies
for creating new businesses. In other words, theprocess of linking R&D results to business is missing. So, the Valley of Death does exist within the
NTT Group. I consider this to be the most crucial
issue in driving NTT’s R&D, and NTT is implementing measures to overcome its Valley of Death.
13. Roles of R&D in supporting the resonant
communication environment
As the source of the cohesive force within the NTT
Group, NTT’s R&D has produced numerous results
and has been a driving force for the Group’s business.
However, in view of the drastic changes in the environment surrounding the Group, such as the paradigm
shift from telephony to IP technology, it is necessary
to review the role of NTT’s R&D within the Group.
Specifically, it will play four roles (Fig. 14):i) Supporting the business of group companies
through an increased emphasis on the development of fundamental core technology that will
afford a competitive edge,ii) Utilizing R&D results to explore new business
opportunities extensively in fields other thantelecommunications,iii) Deploying services in the global market andbeing a leader in the market,
Vol. 1 No. 1 Apr. 2003

iv) Helping to solve social issues (such as declining
birthrate coupled with an aging population, andenvironmental problems), revitalize the Japanese
economy, and advance science and technology.
14. Overcoming the “Valley of Death” by using acomprehensive producer function
For NTT’s R&D to play these roles, a “comprehensive producer function” will be introduced in the NTT
holding company (Fig. 15). It will be a good reviewer and critic of the core technologies created by NTT
Laboratories and the technologies and products available on the market. Also, it will plan and propose cutting-edge developments for commercialization orbusinesses that can be created by combining thesetechnologies and products, will promote practicaldevelopment for commercialization and businesslaunches, and will actively pursue market and technical trend research as well as marketing. This function
will overcome the most crucial R&D issue—the Valley of Death—and will act as a bridge between R&D
results and business. As the needs of each operatingcompany become more individualized and diverse, it
is important to clarify who will assume the risk andresponsibility of development for commercializationand to ensure the steady and efficient development oftechnology. NTT will move ahead with the exploration of new businesses by reaping the benefits of its
R&D, which may include products and services
developed through alliances with relevant industries.

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