Fujitsu sets up a new subsidiary in Germany

Fujitsu signalled a fresh sales offensive to take advantage of the newly deregulated European telecomms market earlier this week, setting up a subsidiary in Germany.

The Japanese equipment giant's German subsidiary will market telecomms hardware - including fibre optic switches, transmission systems and digital technology - with Fujitsu expecting this to double its European telecomms sales to Y40 billion ($300 million).

The initiative comes only days after the deregulation of the European Union telecomms market on 1 January, a move that ended most national operating monopolies and will encourage more telephone carriers to invest in networks in Europe.

Fujitsu, which already has one UK operation, sees this as a chance to break up the perceived watertight relationship between national telcos and their equipment suppliers. Before liberalisation, Fujitsu described its chances of penetrating the European market as a ?snowball's chance in hell.?

However, the Japanese company faces stiff competition in Germany, with Siemens occupying pole position, while also being one of the top five players worldwide.

While Siemens refused to comment on Fujitsu?s action, a spokesperson was keen to say that it did not feel threatened by deregulation. ?The liberalised telecomms market is nothing new in Germany,? he noted. ?Over the past three years Siemens has fought for business from 23 carriers, 20 of whom have brought equipment from us.?

He also suggested that Fujitsu was making a mistake by directing so much attention to Europe in a time of globalised markets.

This view may amount to over-confidence, according to John Matthews, principal consultant at IT analysts Ovum. He argued that current deregulation will shake up the market hierarchy.

?At the moment Fujitsu is around number eight in the telecomms world and looks set to benefit as new players enter the equipment market, giving carriers significantly more choice,? he said.

Fujitsu is the leading supplier of fibre optic switches and transmission systems in the US as well as being active in emerging digital subscriber loop (DSL) technology.

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