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NTT Corp. confirmed Tuesday that five of its subsidiaries will merge into a single provider of IT services.
Dimension Data, NTT Communications, NTT Data, NTT Security and NTT’s innovation lab will roll into an entity called NTT Inc. The parent company said it will establish NTT Inc. by the end of March 2019.
The merger will tackle the brand confusion and a sort of auto-cannibalism that have resulted from these NTT Corp. subsidiaries offering similar services and competing against one another. And NTT executives say merging the companies offers the best strategy to approach quickly evolving global market.
“We’ve seen rapid progress in technology innovation; disruption caused by new business models, and the aggressive expansion of innovative competitors,” NTT Corp. said. “These factors have led to clients’ increasing demand for digital transformation. We believe it’s an opportunity for us to create new value and increase our presence in the global market.”
Reports about a merger between the first three companies surfaced last week, but NTT’s communications team confirmed that the transaction will also involve NTT Security and NTTi3.
Chris Davis, NTT Communications’ senior director of marketing for the Americas, told Channel Partners that the merger will impact NTT America, which is part of NTT Communications. NTT America has been a been a visible participant in the indirect sales channel.
“NTT Group’s announcement of strategic initiatives are aimed at delivering better quality services, providing greater reach and scale, and driving innovation to help serve our clients’ demands for large-scale digital transformation,” Davis said. “The new measures being introduced include a restructuring of NTT operating companies and an increased commitment to global research and development.”
NTT said Tuesday that Dimension Data, NTT Communications and NTT Data earn more than $20 billion collectively outside of Japan, annually. The company predicts the merged company will make $38 billion in operating revenue each year.
NTT Corp. CEO Jun Sawada will be the CEO of NTT Inc., which will be based in Tokyo. Early estimates have the company’s total number of employees at 163,000.
NTT Corp. also plans to roll out NTT Venture Capital L.P., an “innovation fund” that will promote research and development within NTT and technology investment outside of the company.
For additional details of NTT’s plans for NTT Inc., read its announcement.