Fujitsu Annual Report 1997 - Operational Review

Telecommunications

Japan

In the Japanese telecommunications market, the use of ISDN lines and high-speed leased lines increased dramatically as the popularity of the Internet and intranet systems continued to grow. Beyond that, the demand for ever faster, larger-capacity telecommunications was fueled by the linkups between common carriers that resulted from government deregulation. Cellular phones and the personal handy-phone system (PHS) also enjoyed a banner year. In this active market, demand grew about 35% over the previous fiscal year. Fujitsu delivered systems of all types to common carriers, including digital switching systems, optical communications systems, cellular phones and their base stations. The company aggressively responded to the growing demand for telecommunications systems and developed new products that will make up future networks.

North America

GTE

The U.S. network market is expanding with the advanced use of the Internet, rapid growth in electronic commerce and new service opportunities resulting from deregulation. In response, Fujitsu's SONET optical transmission systems, the backbone of these network applications, were delivered at record levels to the Bell Operating Companies (BOCs) and other network service providers. Fujitsu's ability to satisfy customer demand allowed the company to maintain its market share leadership position among the BOCs. Business resulting from the agreement with GTE the previous year progressed well with the delivery of SONET systems. GTE is the largest U.S. provider of local telephone services. Going forward, Fujitsu is aggressively developing new products, especially SONET and ATM systems, to strengthen the company's position in the very dynamic U.S. networking market.

Asia

Fujitsu delivered telecommunications systems to countries throughout Asia, including digital switching systems and SDH optical transmission systems. Orders for large-scale telecommunications systems came in from the People's Republic of China, where a new telecommunications infrastructure is being built, Indonesia, the Philippines, and Malaysia, where new demands are expected because of increased operations by private common carriers. Deliveries to Hong Kong and Singapore were also substantial as these countries continue to introduce new multimedia services. The company also received two significant orders for large-scale optical submarine cable systems. One is for a system that spans 4,500 km and links Singapore, Indonesia and Australia. The other is for a system that will link China, Korea and Japan. Fujitsu provides a variety of systems to meet the needs of individual markets.

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