U.S. Firms Join Japan on Busy Data Party Line : L.A.-Tokyo Traffic in Communications Heavy

Rush hour comes every night--the electronic rush hour, that is.

Offices are dark and locked up in Los Angeles and other U.S. cities, but from across the Pacific the high-tech traffic streams in: fax and telex messages sent by Japanese companies to their American subsidiaries.

“Most of the traffic from Tokyo to Los Angeles comes at about midnight our time,” said Fumio Katsumata, a Los Angeles administrator with Marubeni America, a trading company that has more than 140 offices worldwide.

The electronic rush hour is just one example of the fast-growing communications ties linking the United States and Japan, as their giant economies become increasingly intertwined. Some 800 Japan-based firms have offices in Southern California, with large concentrations also in New York, Chicago and San Francisco.

Japanese executives aren’t the only ones, of course, who use fax, telex and other communications technologies. They may be unique, however, in the amount of time they spend talking long distance and transmitting material electronically across oceans.

As a result, companies that sell such services and equipment are in a spirited race for a market valued at as much as $250 million a year in Los Angeles alone.

“What I’m seeing here in L.A. is probably the fastest-growing marketplace that I could find,” said Dennis R. Kruse, an AT&T; sales manager who oversees a 25-person team that is dedicated solely to Japanese clients.

Japanese culture can partly explain why the marketplace is growing quickly. The Japanese style of decision making, which emphasizes a broad consensus, makes for a great number of messages and reports flowing between offices. One market research study found that Tokyo firms communicated six times more often with their foreign affiliates than did American ones, said Bill Davidson, an associate professor of international business at USC.

Business Considerations

“Japan is in a category by itself in terms of the intensity of communication back to headquarters,” Davidson maintained.

But more than culture keeps the circuits busy; clear-eyed business considerations also play a part. Tokyo-based companies commonly have outposts in many countries with disparate time zones. That means workers in one city may be going to sleep while their colleagues in another are having their first cup of coffee--making voice communication impractical.

Fax machines, which transmit copies of documents, have proven particularly useful. Other electronic methods of sending written messages, by contrast, typically are not set up to convey the kanji symbols of Japan’s alphabet.

In fact, of all long-distance calls going from this country to Japan, 40% actually are fax transmissions--and the percentage from Japan to the United States is even higher, said BillBurgess, vice president and general manager of U.S. Sprint International.

“There’s a staggering difference” between Japan and Europe, he added, pointing out that less than 15% of U.S. long-distance calls across the Atlantic carry fax messages.

Some believe the Japanese have an affinity for advanced communications technology--period. In an arrangement with MCI, for instance, Japan’s largest newspaper has found a surprisingly swift route to readers in Southern California and elsewhere in the United States.

It begins in Tokyo, where stories written by the reporters of Yomiuri Shimbun are transmitted to a satellite hovering over the Pacific. The satellite then beams the data to a land station near San Francisco, which relays it via ground cables to a printing plant in Los Angeles.

Big Stakes

“Readers in both countries read the same news on the same day--a truly competitive edge for circulation,” said Fran Zone, an MCI spokeswoman in San Francisco.

For communications firms, the stakes in the U.S.-Japan market are much bigger than they used to be. In 1978, U.S. callers spent 19.8 million minutes on the phone to Japan, according to the Federal Communications Commission. But by 1987, that figure had soared to 175.7 million minutes.

In Los Angeles, Tokyo-based firms now spend as much as $250 million annually on telecommunications service and technology, including long distance, telephones, switching equipment and voice mail, according to AT&T;’s Kruse.

AT&T; continues to enjoy a wide lead in long-distance telephone service to Japan, by all accounts, although MCI and Sprint have made gains in recent years. Such companies as Northern Telecom, NEC, Fujitsu, Siemens, Ericsson and Rolm are vying with AT&T; for equipment sales--about 40% of the total market.

Mindful of the stakes, AT&T; in 1987 set up a special sales team devoted exclusively to Japanese customers. The firm brought in experts to tutor its staff on aspects of Japanese business, culture and etiquette unknown to many Americans.

Service Approach

The U.S. workers were taught, for example, not to take offense if Japanese executives became silent during negotiations. “You’ll offer a given position, and immediately they (Japanese negotiators) will look down on the floor thinking about that position,” Kruse noted. “If anything, it’s a positive sign. But as an American, you find yourself very uncomfortable.”

Some communications companies have found that they, too, need to stress a willingness to communicate when dealing with their service-conscious Japanese customers. MCI has been known to guarantee in advance that it will provide regular status reports of any future glitch in service.

“They (Japanese customers) need more frequent updates,” said Alan Garratt, a spokesman for MCI. “I’m not saying it’s unreasonable. They’re very interested in what you’re doing and how things are going.”

In fact, it may be hard to generalize about the Japanese subsidiaries in this country because--unlike purely American or Japanese companies--they are in a sense hybrids, shaped by the culture of each nation. Many try mightily to stress their U.S. roots and ask Americans to look at them in that light.

“The point is we’re doing business in the U.S.A.,” declared Katsumata of Marubeni America.

Kruse agreed that studying Japanese culture won’t automatically translate into new business for Americans. But gaining insight into the customer hardly seems like a waste of time, either: In April, Marubeni purchased a $60,000 computerized telephone-call switching system from AT&T; for its Los Angeles office.

Learning about Japan “won’t close the sale,” Kruse noted in an office decorated with a poster of a Japanese puppet show. “But it will give you quicker acceptance.”