The company started with the production, sales and maintenance of telephones and switches. NEC modernized the production facilities with the construction of the Mita Plant in 1901 at Mita Shikokumachi. It was completed in December 1902.
The Japanese Ministry of Communications adopted a new technology in 1903: the common battery switchboard supplied by NEC. The common battery switchboards powered the subscriber phone, eliminating the need for a permanent magnet generator in each subscriber's phone. The switchboards were initially imported, but were manufactured locally by 1909.
NEC started exporting telephone sets to China in 1904.
In 1905, Iwadare visited Western Electric in the U.S. to see their management and production control. On his return to Japan he discontinued the "oyakata" system of sub-contracting and replaced it with a new system where managers and employees were all direct employees of the company. Inefficiency was also removed from the production process. The company paid higher salaries with incentives for efficiency. New accounting and cost controls were put in place, and time clocks installed.
Between 1899 and 1907 the number of telephone subscribers…