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  • TTNet Starts Low-Cost Phone Service in Tokyo
  • January 12, 1998 (TOKYO) -- Tokyo Telecommunication Network Co., Inc. (TTNet) started its "Tokyo Denwa" (or Tokyo Telephone) service Jan. 7 for users within the Tokyo metropolitan area.

    TTNet's service features low call charges as its selling point, with a three-minute local call priced at 9 yen (7 cents) and 72 yen (54 cents) for three-minute calls of more than 100km.

    Its tariff structure is lower than that of Nippon Telegraph and Telephone Corp. and new common carriers for all distances and times.

    "We are offering this new service at the risk of TTNet's future," said TTNet president Katsumi Iwasaki.

    The company has advertised widely since October 1997, especially on television and radio. It gained 504,000 customers at the start of the service. The total number including those waiting for line switch-over is 632,000.

    TTNet hopes to surpass the million customer line in March. As early as fiscal 1998 it expects to gain 2 million subscribers, which is TTNet's projected break-even point.

    However, TTNet is operating amid severe business conditions. NTT and the other competitors engaged in the long-distance telephone business are planning to counter the Tokyo Denwa service by reducing their charges on three-minute calls over 100km to 90 yen (68 cents) in February.

    Tokyo Denwa's service charges will still be lower. But in some cases, the services offered by NTT and other companies together with their discount packages could be less costly.

    "We will do our best to compete with NTT and the others," said Shoichiro Matsukawa, senior managing director of TTNet.

    TTNet also offers its Direct Subscriber Telephone service, with a subscriber loop straight to a customer's home. The Tokyo Denwa service relies on leasing NTT's network lines, but the Direct Subscriber Telephone service is TTNet's own telephone service.

    Since the inception of the Direct Subscriber Telephone service, it was faced with a restriction because calls could not be received from NTT telephones. That restriction was lifted on Jan. 7.

    "For the time being, our business requires an emphasis on the Tokyo Denwa service," said Matsukawa.

    TTNet is one of a limited number of area communication carriers capable of competing with NTT. TTNet appears to be heading its own way as a "relay communication carrier of a local area type" using NTT's area network.

    (Nikkei Communications)

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    Updated: Sat Jan 10 15:02:18 1998