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In response to plans by rival companies to slash their rates, Japan Telecom Co. said Thursday that it will create new rate categories for some calls within a prefecture, reducing charges in a number of areas by 44 percent on average.

Starting on Oct. 1, daytime calls within a prefecture over a distance of between 30 km and 60 km will be reduced from 40 yen for every 45 seconds to 30 yen, Japan Telecom said.

Nighttime charges for calls over 30 km or more will all be reduced to 20 yen for every 90 seconds, the company added.

After both the East and West divisions of Nippon Telegraph and Telephone announced their decision last month to cut nonlocal calls within a prefecture by 40 percent on average, DDI Corp. also announced that it would cut charges for similar services.

The companies acted quickly to offer discount rates, apparently because a new connection system is set to start in May, which will require subscribers to register with a primary telecom firm in advance.

Telecom firms are offering these incentives to try to attract subscribers who will remain loyal after the new system comes into operation.

Flat phone fee mulled

The Posts and Telecommunications Ministry is considering obliging the two regional phone companies of Nippon Telegraph and Telephone Corp. to adopt a uniform telecommunications fee regime that would include Internet use, ministry officials said Thursday.

But to equalize telecom fees throughout Japan, the ministry is considering setting up a fund that would be used to compensate for existing cost differences between urban centers and rural regions.

Possible revenue sources the ministry is considering for the new fund include raising taxes for businesses that use the Internet, raising fees for subscribers to NTT’s integrated services digital network and fiber-optic network, and profits from selling the government’s hefty holdings in NTT’s stock.

The Telecommunications Council, an advisory body to the posts and telecommunications minister that is discussing the realignment of NTT group firms, will take up the issue in detail. The ministry is expected to submit related legislation to the Diet at its regular session early next year, they said.

The exact costs associated with launching a flat fee regime are still uncertain, with other telecom carriers expected to resist new taxes and other financial burdens.

But the ministry is aiming to narrow the so-called “digital divide” between major cities and less populated areas, where providing Internet services is not cost effective. It also wants to promote the popularization of information technology via uniform telecom fees.

A fixed-charge service for unlimited use of the Internet via ISDN is currently available in major cities, and NTT plans to reduce ISDN fees and expand the service throughout Japan by fiscal 2002.

Since planned cuts to interconnection fees that NTT charges other carriers for use of its local networks are expected to squeeze its profitability, the telecom giant has been cautious toward the introduction of a nationwide uniform fee system.

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