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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • Japan Telecom to Cut Overseas Telephone Charges Again
  • January 19, 1999 (TOKYO) — Japan Telecom Co., Ltd. will lower its overseas telephone charges again on Jan. 25, after having reduced the fees as recently as December 1998.
    Phone calls to 97 countries, including the United States, Britain and Asian nations, will be covered by the price reduction.

    Price cutting competition among overseas telephone companies has become increasingly fierce since last October. It started when DDI Corp., a long-distance new common carrier, came into the market with reduced rates. Japan Telecom, KDD Corp. and International Digital Communications (IDC) Inc. responded in unison and cut their rates in December.

    DDI quickly reacted with an immediate rate cut in January. This was followed again by the latest announcement of a rate reduction by Japan Telecom.

    DDI, KDD and IDC are examining whether or not to cut the charges again.

    Japan Telecom’s telephone charges for calls to the United States will be cut from the present rate of 180 yen (US$1.60) for three minutes to 150 yen (US$1.30) during the night hours (11 p.m. to 8 a.m.). By using its 25 percent discount menu, which requires no subscription fees or monthly basic fees, one can place a call to the United States for 112.5 yen (99 cents) for three minutes, lower than the presently lowest rate of 126 yen (US$1.10) for three minutes offered by DDI. Since DDI does not have any discount plan, using Japan Telecom’s night rate will be the cheapest way to call a party in the United States.

    Overseas telephone charges have been reduced every few years in the past, but the price cutting competition picked up suddenly in the past three months. For calls to the United States, the charges have been cut to about half of what they used to be before September 1998.

    The typical picture of competition of “KDD vs. others” has been crushed altogether, and “the age of disorderly competition” seems to have started, analysts said.

    DDI and Japan Telecom, whose main source of revenue is domestic telephone charges, still have something in reserve after lowering overseas charges. But for KDD and IDC, which depend heavily on international calls, the reduction in overseas telephone charges is a matter of life or death.

    The matter is particularly serious with IDC which, unlike KDD, has no access to domestic lines.

    The merger with Nippon Telegraph and Telephone Corp.’s long distance international communications company scheduled to come into existence in July 1999 at the time of NTT reorganization has suddenly become more realistic. KDD, which used to be the top international telephone company, no longer has the luster it once had.

    Related stories:
    ¥ Japan Telecom to Slash Phone Call Prices to U.S.
    ¥ KDD to Cut Internat’l Call Rates to Compete with Rivals
    ¥ IDC Cuts International Calling Rates; Competition Intensifies

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