Two firms in the Nippon Telegraph and Telephone Corp. group will probably lower charges for their fixed-line phone service in the face of discount campaigns by rival carriers, including KDDI Corp. and the Softbank Corp. group, sources said Friday.
NTT East Corp. and NTT West Corp. may reduce the basic charge for household users in metropolitan areas by around 200 yen from the current 1,750 yen, the sources said.
The reduction, expected to be formalized within the month, would be the first for NTT since its predecessor, the state-owned Nippon Telegraph and Telephone Public Corp., was founded in 1952.
Earlier this week, KDDI Corp. unveiled a plan to launch a discount fixed-line phone service next February using an Internet protocol-based network.
Under KDDI’s plan, the monthly basic charge is set at 1,500 yen nationwide, 250 yen cheaper than that for fixed-line services currently offered by NTT East and NTT West for household users in metropolitan areas.
KDDI will be able to offer cheaper rates as it plans to curb the interconnection charges it pays to the NTT group by setting up its own communications equipment at phone stations to connect telephone lines to its own network.
Japan Telecom Co., which recently became part of the Softbank Corp. group, said earlier this week that it will make an additional 50 yen cut — to 1,500 yen — for the fixed-line phone service it plans to launch in December.
The two regional NTT group firms generate a total of some 1.8 trillion yen a year in revenue from basic fixed-line charges — higher than their revenue from calls being placed.
The expected cut in monthly basic charges may deal a blow to the NTT group’s earnings, industry observers say.
Meanwhile, NTT East and NTT West are considering scrapping initial fees of 72,000 yen charged to subscribers in an effort to compete with KDDI and Japan Telecom, which do not charge these fees.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.