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Japanese telecoms group eyes London as new base

One of Japan’s largest telecoms groups is expected to open its new international headquarters in London in the coming months, according to British government officials.

Jeremy Hunt, the foreign secretary, held talks with the management of NTT, one of the world’s largest telecoms companies, on Monday during a trip to Tokyo. Mr Hunt also held meetings with Shinzo Abe, the prime minister, and senior executives of Toyota, the automotive group.

NTT Communications, an internationally focused subsidiary of NTT, denied that any decision had been made ahead of an announcement in July. But one Whitehall figure with knowledge of Monday’s discussion said the company had made up its mind. “While the decision is officially still awaiting confirmation, it’s clear Britain is the most attractive destination,” the person said. “The global financial hub, the tech triangle between Oxford, Cambridge and London, and the UK’s open society are all contributing factors.”

Such a decision would be seen as a vote of confidence in the UK at a time when other Japanese companies are becoming jittery about investing in Britain given the political uncertainty around Brexit.

Since the EU referendum in 2016 the Japanese government and senior executives have warned about the impact of Britain losing its frictionless trade with the EU. Honda has announced plans to close its Swindon factory while Nissan has reversed its decision to build the X-Trail SUV in Sunderland, and both Sony and Panasonic have moved their European headquarters.

NTT’s telecoms unit, NTT Docomo, competes with SoftBank and KDDI in Japan but also has an extensive international network of companies. These include NTT Data, the second largest data centre owner in the world, and Dimension Data, a large technology services provider it acquired in 2010.

NTT said last year that it planned to merge NTT Communications, Dimension Data and NTT Security, its cyber unit, into one company as part of an attempt to create a successful global services business to boost its growth.

Thursday, 10 January, 2019

Rivals, including BT, have tried to build large global telecoms networks to service multinational companies but have struggled to make the model work.

NTT is set to formally unveil the new branding, strategy and resources behind the combined company in July.

A person at the company with knowledge of the plan said that the international business would be headquartered in London once the NTT units had been merged.

Dimension Data employs 2,500 people in the UK — in London and the Midlands. The company is based in South Africa but its executive team is based in London where the company was listed before the $3.2bn NTT takeover.

Mr Hunt said during his talks with Mr Abe that the British government was still seeking “tariff-free frictionless trade” with the EU after Brexit. The foreign secretary, who lived in Japan after graduating, said that ministers were “focused on avoiding a no-deal Brexit”.

Britain and Japan have so far failed to “roll over” their existing trade deal enjoyed through the EU, one of 40 such agreements which need replicating after Brexit.

Mr Hunt said this was in part owing to “concern they have about Brexit paralysis or indecision”. “They want us to make up our minds as to what kind of Brexit we are going to have,” he told the BBC.

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