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More Japanese mergers

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Hitachi to merge subsidiary to strengthen networking business
Following the announcement of a major Japanese merger Hitachi has now announced that it has decided to internally merge wholly owned subsidiary Hitachi Communication Technologies, Ltd. on July 1, 2009. This merger is geared toward strengthening Hitachi’s value proposition, technological and system integration capabilities relating to Next Generation Networks (NGNs). Hitachi has positioned this area as a key focus of its Social Innovation Business and believes future growth can be realized by bringing together the related businesses of both companies. Hitachi provides solutions and services, including IP networks and video distribution systems for communications carriers, while Hitachi Communication Technologies excels in highly reliable, high-speed and large-capacity processing technologies, namely telephone exchange equipment, mobile phone base stations and other mobile products, and optical networking products. Leveraging the expertise in building large-scale systems for social infrastructure that Hitachi has gained in power systems, transportation systems and other areas will allow the company to comprehensively provide solutions, services and products that are safe, secure, highly reliable and unmatched.

Hitachi established Hitachi Communication Technologies in October 2002 by carving out its Telecommunication Systems Division and integrating with Hitachi Telecom Technologies, Ltd., a wholly-owned subsidiary, which has developed and manufactured communications equipment such as PBX- and IP-related products for corporate customers. The primary goals behind the integration of operations were consolidating and fusing communications technology resources to bolster development capabilities, speed up operations and improve management efficiency. Since then, Hitachi Communication Technologies has concentrated on developing new products and building new businesses mainly in the mobile, broadband and IP telephony fields. These efforts have been conducted under a stable and efficient management structure that has put greater priority on some businesses, such as focusing on these aforementioned fields. Through this approach, Hitachi Communication Technologies has built a solid customer base in Japan and overseas.

However, the operating environment surrounding the networking business has begun to see a rapid shift toward IP technology-based NGNs, against the backdrop of further expansion in the mobile market, and the broadband market, namely FTTH (Fibre To The Home). As a result, this trend has made it increasingly important to fuse computer and communications technologies, centred on IP technology, in addition to capturing synergies by fostering collaboration among solutions, services and product businesses. Furthermore, in order to expand the networking business globally, combined with strengthening corporate governance, resources in the sales, system engineering and product development engineering, it is critically important these areas are fully optimized.

To respond to these conditions, Hitachi decided to integrate Hitachi Communication Technologies as a means to fully optimize the networking business-related sales, solutions and services, communications network products and other organizations in Hitachi’s Information & Telecommunication Systems Group. This move should establish a solid networking business structure within the Hitachi Group as the basis for developing a stronger and more competitive business worldwide.

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