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KDDI to Launch Discount Fixed-Line Internet Phone Service

Posted on: Thursday, 16 September 2004, 06:00 CDT

Sep. 16--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 in the Nippon Telegraph and Telephone Corp. group.

Following KDDI's announcement, Japan Telecom Co., which recently became part of the Softbank Corp. group, immediately said it will make an additional 50 yen cut in the rate for the fixed-line phone service it plans to launch in December, reducing its basic fee to 250 yen less than those of NTT East Corp. and NTT West Corp.

The latest moves are expected to intensify competition among telecom carriers in Japan.

Japan Telecom's basic fee will be either the same or lower than that of KDDI, and its local call rate will also be 0.1 yen cheaper than that of KDDI, the country's second largest phone operator, according to Softbank.

Under KDDI's plan, the basic charge, including fees for using touch-tone services, is set at 1,500 yen nationwide, 250 yen cheaper than that of 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 will be about 100 yen cheaper than those by the largest NTT group firms.

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

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

On Aug. 30, Softbank said it and its group firm Japan Telecom will start offering a fixed-line phone service in December whose basic fee is 200 yen less than those of NTT East Corp. and NTT West Corp.

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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