In a bid to become the leader in high-speed Internet connection services, ADSL providers and fiber-optic carriers are engaged in fierce price-cutting competition.
Even among ADSL providers, competition has intensified between Softbank Group’s Yahoo BB and rival companies.
Yahoo BB created an ADSL boom by offering free tryouts. Its entry into the market initiated a price war and huge growth in subscriptions.
Not to be outdone, rival ADSL providers are also offering free tryouts, and fiber-optic carriers are offering discounted connection fees.
Household subscribers to broadband services numbered some 10.48 million lines as of the end of May, according to official statistics.
Softbank Corp. President Masayoshi Son attributes the sharp subscription growth to deregulation.
“We were able to enter the market as a result of the deregulation implemented in the last three years,” Son said, adding that the government’s “e-Japan strategy” helped spur competition among broadband carriers.
With broadband access still limited to only 20 percent of households, carriers are braced for tougher competition to come.
ADSL providers are expected to offer 20 to 26 Mbps services this summer, up from the current 12 Mbps. The price of a 12 Mbps ADSL subscription, including modem rental, runs from 3,500 yen to 5,000 yen a month. The price of a 26 Mbps subscription is expected to be set at slightly above that level.
The price of 100 Mbps fiber-optic services has dropped sharply since the spring to around 5,400 yen a month.
In a bid to boost the number of subscribers, more fiber-optic carriers now shoulder the initial setup costs, which are normally around 30,000 yen.
As for content and service quality, Son admits Japan is still far behind South Korea. But he is quick to add there are indications Japan is catching up fast.
For instance, the diffusion rate of low-priced Internet protocol telephones in Japan is by far the highest in the world, he said.
And though the number of broadband users in Japan is smaller than in South Korea and the U.S., the number of “megaband”(1Mbps) users in Japan is the world’s highest.
Softbank has started IP-type TV broadcasting. Son believes it will not be long before hundreds of channels are offering a choice of thousands of videos by using a single remote control.
“We will become able to provide any and all sorts of information via various media, such as IP telephones and TV, with only one line,” he said.