Callback services draw telecom giants’ ire

Callback services, though introduced in Japan almost five years ago, continue to thrive under a certain veil of mystery.

Many Japanese and foreigners alike are a bit suspicious of the cheap and technologically confusing international telephone services, their legality and how the low prices are achieved. After all, most callback companies offer standard rates of 40 yen a minute or lower for a call to the United States, 24 hours a day. But the standard daytime rates of telecom giants Kokusai Denshin Denwa, International Telecom Japan and International Digital Communications can be as much as five times that, at 200 yen to 210 yen a minute. Displeased with the existence of callback, the three telecommunications companies and have recently increased their attempts to restrict it.

“The callback services use KDD’s international telephone network without paying KDD a fee and they make it difficult for our other users to have their international calls connected,” said Yosuke Fukuma of the telephone giant’s public relations office. ITJ and IDC echoed this complaint, saying that the callback services “free-ride” on their circuits to make the initial connection to a callback switchboard and that this should be stopped.

The companies are referring to the process in the standard callback method of call reorigination. The customer places a call to the callback company’s switchboard in another country and then hangs up after allowing one or two rings. The switchboard mechanism then calls the customer back and connects him or her to the dial tone of the foreign country. The switchboards of callback services in Japan are predominantly based in the U.S., where telephone rates are much cheaper.

“Basically we are exporting U.S. dial tone to Japan and that’s why it is so much cheaper. The U.S. industry is fiercely competitive and therefore the rates are very close to actual cost,” explained Keith Durrant, president of Access Telecommunications Japan. “In Japan’s highly regulated market, the rates are set way above cost by the protected telephone companies,” he said.

Durrant and other callback service representatives concede that their companies do not pay KDD, ITJ or IDC for the use of their lines when their customers place the initial international call to the callback switchboard. However, many claim there is nothing unusual about the practice of not paying for a call to a computerized device or system. “It’s like calling to turn on your bath or something like that,” Durant said. “People make that call without paying and the phone companies do not care.”

Nevertheless, KDD, ITJ and IDC are currently lobbying the Ministry of Posts and Telecommunications and the International Telecommunications Union for restrictions on call reorigination.