DDI Pocket Inc., Japan's largest provider of personal handy-phone system services, will invest 70 billion yen to establish its own Internet communications network within five years, bypassing existing networks run by Nippon Telegraph and Telephone Corp.
The strategy is expected to save DDI Pocket several billion yen a year on NTT interconnection charges, the PHS operator said Thursday.
DDI Pocket said it may introduce a flat-rate system for all calls in light of the expected cost reduction.
Softbank Corp. and KDDI Corp. have already adopted flat-rate systems for their fixed-line telephone services, bypassing NTT networks.
DDI Pocket plans to install special devices at 2,000 NTT phone-switching stations in two years to enable its own networks to bypass NTT's.
The installation of these devices is allowed under the telecommunication industry's deregulation program.
The installation will cover 80 percent of Internet-based telecommunications operated by DDI Pocket, the company said.
The company will also increase the speed of its PHS data communications service to 256 kilobytes per second, twice as fast as the current service, by the end of the year.
Earlier in the day, DDI Pocket said the company will be renamed Willcom Inc. on Feb. 1, with U.S. investment firm Carlyle Group having bought a 60 percent equity stake in it.