The ruling Liberal Democratic Party on Tuesday began weighing the scrapping of a law barring the complete privatization of telecom giant Nippon Telegraph & Telephone, a move that could pave the way for the sale of all of the government’s remaining stake, which is worth over ¥4 trillion ($27 billion).
The LDP will discuss whether proceeds from the sale of the government’s NTT stake should be used to fund planned increases in defense spending in coming years, according to party officials.
The party’s project team tasked with reviewing the matter held its first meeting Tuesday. It will make its recommendations in November at the earliest.
Akira Amari, a former LDP secretary-general who chairs the discussion group, told the meeting he has been “instructed to review issues including the scrapping of the NTT law,” which requires the government to hold at least one-third of the shares in the former telecommunication monopoly.
The government currently has a 33% stake in NTT, which was privatized in 1985.
The LDP estimates that sales of the government’s remaining stake in the company over 25 years would raise around ¥200 billion a year without significantly impacting the shares’ demand and supply balance in the market.
Amari said share sales would reduce the government’s influence on NTT’s operations and help increase the company’s international competitiveness.
The launch of the project team’s discussions comes at a time when the government is planning a five-year revamp of the country’s defense posture by spending a combined ¥43 trillion, raising its annual defense budget to 2% of its gross domestic product in the fiscal year beginning April 2027.
As the country runs on a single fiscal year basis, the government of Prime Minister Fumio Kishida has yet to clearly show how the defense expansion will be funded during that period.