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| 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,
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.
� Japan Telecom to Slash Phone Call Prices to U.S.
� KDD to Cut Internat'l Call Rates to Compete
� IDC Cuts International Calling Rates; Competition
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