Telecommunications

September 2006

Govt Wants NTT To Allow Further Access To All Networks
Nippon Telegraph and Telephone Corp. has been called on to open its fiber-optic, cellular phone and IP (Internet Protocol) networks to other firms, in a report drafted Wednesday by a Communications Ministry panel. The ministry will now begin weighing specific plans. NTT is already required to make its fixed-line phone network available to other service providers. By forcing NTT to pry open its IP and other networks, the ministry aims to promote price cuts as well as competition among services for transmitting video and large amounts of data. It also seeks to create a level playing field to cut prices and foster new offerings for high-speed Internet and cell phone services. The report calls for wider access to NTT's fiber-optic network. NTT charges a monthly connection fee of 5,074 yen for each line to a residence when leasing lines to other firms. The report signals that the life span of optical fibers now exceeds the current service life of 10 years as set by the government, therefore the fee can be lowered. In addition, NTT is required to allow other providers to use its next-generation network, which will feature IP technology that is still being developed. The network is expected to come onstream in the second half of fiscal 2007. The panel also approved an alliance that will allow NTT East Corp., NTT West Corp. and NTT DoCoMo Inc. to offer service packages combining fixed-line and cell phone service using a single telephone number. Indoors, the cell phone would function as a cordless handset, but users would enjoy low fixed-line-phone charges. But to prevent market dominance by the NTT group, the committee demands that NTT grant other firms equal access to its networks. (The Nihon Keizai Shimbun, September 14, 2006)

Telecoms Want Surcharge To Maintain Universal Service
Nippon Telegraph and Telephone Corp., KDDI Corp. and other leading telecommunications firms are considering requesting a 7 yen monthly surcharge on all customers starting in January, including cellular phone users, to maintain fixed-line service in remote areas, The Nihon Keizai Shimbun learned Wednesday. Fixed-line operations in mountainous regions and remote areas are turning unprofitable because of dwindling demand as customers shift to cell phones. In light of this, the Communications Ministry established a system in 2002 to offset losses incurred by NTT East Corp. and NTT West Corp. for maintaining universal fixed-line service, which they are required to do. As a result, leading telecom firms as well as cell phone service providers were required to help shoulder the burden, but specific figures or methods have not been set. The Telecommunications Carriers Association estimates that roughly 15.3 billion yen in fiscal 2006 alone would be needed to cover the losses. NTT and KDDI are leaning toward a proposal that would have all phone users share the burden via a surcharge. Other companies, including Softbank Corp., have yet to make a decision, but are very likely to follow in the their footsteps. The ministry could give the green light to the plan at the end of the week. By dividing the estimated loss of 15.3 billion yen by the total of 173 million telephone numbers in Japan, which includes more than 90 million cell phone numbers, the monthly cost per phone number would be 7 yen. NTT, KDDI and others aim to make this a separate charge from basic service and call charges, with users likely to pay the full amount. A family with one fixed-line telephone and three cell phones would be slapped with an additional monthly charge of 28 yen. Since fixed-line operations in unprofitable regions continue to bleed more red ink each year, it is estimated that the losses could roughly double in two years. This is likely to result in an increased burden on phone users. (The Nihon Keizai Shimbun, September 14, 2006)

Vodafone To Lure Subscribers With Discount Handset, iPod Combo
Vodafone KK said Wednesday that it has begun offering a special product package consisting of a cell phone handset and Apple Computer Inc.'s iPod Nano at a discounted price. The Softbank Corp. group firm, which will be renamed Softbank Mobile Corp. on Oct. 1, is offering both the phone and iPod Nano to customers who sign a two-year service contract. Vodafone aims to woo long-term subscribers with the promotion. Vodafone will package Sharp Corp.'s 705SH handset, which carries a retail price of around 13,000 yen, with a 2-gigabyte iPod Nano that regularly sells for 17,800 yen. When a customer signs a two-year contract, they will pay about 13,000 yen for both the handset and iPod Nano. Customers who change their phone plan within two years will be charged additional fees. (The Nihon Keizai Shimbun, September 13, 2006)

Cell Phones To Become The Key To Opening Doors At Work
A consortium including Dai Nippon Printing Co. and Fuji Xerox Co. has developed software enabling smart-card memory chips embedded in mobile phones to substitute for ID cards and keys in identifying workers, The Nihon Keizai Shimbun learned Tuesday. The technology will enable businesses to oversee who is entering and leaving buildings as well as identify who is logging on to computers and printers. Workers will also be able to use the technology to open and close doors at their own homes. Trials will start shortly, with sales to begin as early as next fiscal year. The new software can be used in cellular phones incorporating chips for Sony Corp.'s FeliCa contactless smart-card system. When the handset is held up to a reader, data is transmitted. FeliCa chips are used in cell phones sold by NTT DoCoMo Inc., KDDI Corp. and Vodafone KK. If the phone is lost or stolen, the service can be suspended remotely in a manner similar to communication and e-money services. The software was developed mainly by an alliance of 105 information technology companies. These firms market smart cards and readers, along with devices used in the readers. The new functions will be compatible with readers already on the market. A single reader generally costs some 10,000 yen to 100,000 yen. (The Nihon Keizai Shimbun, September 13, 2006)