NTT to cut fibre-optic line charges

3 Jan 2008

Japan’s leading fixed line telecoms operator by subscribers Nippon Telegraph and Telephone Corp (NTT) is considering cutting the prices it charges other service providers to use its fibre-optic lines, reports Reuters citing people familiar with the situation. The country’s telecoms regulator has been pressuring NTT to cut its prices in a bid to lower entry barriers for alternative providers wishing to enter the market and thus accelerate the spread of high speed internet access services. It is thought that NTT regional operating units NTT East and NTT West could reduce their rates by 7% and 0.5% respectively from the next fiscal year starting in April 2008; both currently charge rival carriers JPY5,074 (USD45.60) per month for accessing a line. Sources say the two units are planning to submit their proposals to the regulator this month for approval. Rival telco Softbank Corp is one of the companies currently using NTT’s fibre-optic network to provide services to end users.

NTT has been struggling to sign up users to its fibre-optic cables, and in October 2007 trimmed its target for signing up 30 million fibre-optic users by 2010 by ten million to 20 million, amid weaker than expected sales of the service. The former monopoly sees advanced fibre-optic technology with high speed internet access and video download capability as key to its plan to replace its stagnating core voice services business. However, the company is falling behind in its quest to sign up new users to the service, which was launched in 2001. NTT had 7.42 million FTTx users at the end of September, making it difficult to see how it can now meet its long-term objectives.

Japan, NTT (NTT East & NTT West), NTT East, NTT West