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Japan Firm KDDI to Launch Discount Fixed-Line Internet-Protocol Phone Service

Posted on: Wednesday, 15 September 2004, 06:00 CDT

Sep. 15--TOKYO -- KDDI Corp. said Wednesday it will launch a discount fixed-line phone service next February running on an Internet protocol-based network, with a lower basic monthly charge than those offered by rival companies under the Nippon Telegraph and Telephone Corp. group.

The basic charge of 1,500 yen nationwide, including fees for using touch-tone services, is 250 yen cheaper than fixed-line services offered by NTT East Corp. and NTT West Corp. for household users in metropolitan areas, the company said.

Basic charges by KDDI for household users in major cities are about 100 yen cheaper than those by the NTT group firms, KDDI said.

KDDI will provide the new service initially in Tokyo, Osaka and Nagoya, company officials said, adding KDDI wants to expand service areas to cover 60 percent of Japan's total population by early fiscal 2005.

The latest move is expected to intensify competition among telecom carriers in Japan.

Softbank Corp. and Japan Telecom Co. are also scheduled to launch a less expensive fixed-line phone service in December.

Industry observers say the NTT group is likely to come up with countermeasures.

Under KDDI's new service called "metal plus" for home telephone users, intra-city call rates are set at 8 yen per three minutes, 0.5 yen cheaper than the NTT group firms, while rates for long-distance calls to anywhere in Japan are set at 15 yen per three minutes, compared with 20 yen to 80 yen offered by NTT Communications Corp.

As for international calls, KDDI's new service charges 27 yen per three minutes for calls to the United States, compared with 160 yen at NTT Communications.

Those rates will apply for daytime calls on weekdays.

For corporate users, call rates to anywhere in Japan are set at 8 yen per three minutes under KDDI's new service, compared with 8.5 yen offered by the NTT group for intra-city calls and 20-80 yen offered by the group for long-distance calls.

KDDI will be able to offer cheaper rates as it plans to curb the interconnection charges it pays to NTT group firms by setting up its own communication equipment at phone stations to connect telephone lines to its own network, company officials said.

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