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Home > Media Reiews > News Review Last Updated: 14:52 03/09/2007
News Review #58: August 20, 2002

Net phoning a hit in Japan

Reviewed By Hitoshi URABE

"Net phoning a hit in Japan"
(by Yuri Kageyama, AP ) International Herald Tribune


The article reports that a new phone system recently introduced in Japan based on ADSL technology is quickly attracting customers, which provides for inexpensive voice phone service within Japan, and to U.S., costing about six cents per three minutes of conversation.

It has been, however, a slow process to finally reach this sophisticated level of service.

It used be NTT, Nippon Telephone and Telegraph, was a government corporation. In addition, they were the sole provider of phone services, as dictated by law. It was set up that way when no one but the government had the capital and technology to lay wires all over the country. NTT naturally operated in a beaurocratic manner enjoying monopoly.

Then as the world, especially that of communication technology, began to advance in big strides, it was the government who became concerned of Japan being left behind with poor infrastructure that could hinder economic growth.

In 1985, NTT was converted into a joint stock company and the government started to sell its shares to the public, gradually transforming it into a private entity in order for it to acquire competitive thinking. New services were introduced, but seemed too slowly to many. The government began to take active measures that included support for new companies to be set up to become competitors, while forcing NTT to lease parts of its established facilities to these new entrants in the market.

Advent of new technology helped to accelerate the process. Among them, mobile phone and ADSL services played a significant part.

Mobile phone service, first introduced in 1979 in Japan, began as something of an extravagance and stayed that way for a decade until 1989 when competitors to the monopoly NTT began to emerge. Aided by the advancement of production technique and business efforts to lower costs, mobile phones penetrated the public at a mesmerizing pace, and a few years ago, the diffusion rate crossed the fifty percent line. As a mobile phone could be an alternative, hence a competitor, to wired services, conventional phone companies began formulating new business models.

ADSL technology is the other factor that assisted dissemination of quality services. Initially, NTT was pushing ISDN, abbreviation for Integrated Services Digital Network, as the technology to replace conventional voice lines. The problem with ISDN, however, was that it required a huge-scale overhauling of network structure already in place to obtain discernible benefit, while the data transfer speed so acquired would only reach 64 kbps. Then a number of ventures began to seek possibilities to provide services over ADSL, acronym for Asymmetric Digital Subscriber Line, which could utilize most of the existing hardware facility, at a data transfer speed of 8 Mbps. Resistance by NTT to hinder the implementation of ADSL and to promote its own ISDN soon subsided upon a tide of people choosing ADSL over ISDN.

During the while, many cable TV companies began to provide internet services, which also helped people to become aware of broadband services. Recent survey indicates that among Japanese people of ages between ten and sixty, 40 percent access internet from home, within which 30 percent would do so via broadband, half of them utilizing ADSL and the rest mostly via cable TV.

It is now apparent that Japan is at the helm of the pack in broadband services in terms of both accessibility and low cost. This is undoubtedly the fastest moving business area now, where growth in general is envisaged but reshufflings of service providers due to fierce competition seem inevitable along the way.

As for ordinary people, even more useful and inexpensive services can be expected to become available to them. In the meantime, at that low cost to converse with a friend in U.S., would it not create a wonderful opportunity to brush up your English?

Copyright © Japanese Institute of Global Communications