TOKYO Nippon Telegraph and Telephone Corp. will launch a fiber-optic service in Japan on Wednesday (Aug. 1) capable of supporting 100-Mbit/second transmissions, opening the way for full-scale fiber to the home.
The service will depend on the readiness of Internet service providers to connect to NTT's fiber-optic network, which will be offered at a basic rate of $73 per month.
NTT's pricing is almost a quarter as much as it had originally planned to charge for the service, but the company lowered its rates after a small company named Usen Corp. initiated a 100-Mbit/s fiber-optic service in a limited area of Tokyo this past March. Known as a cable music distributor, Usen shocked the Japanese communications industry by beating NTT to the punch with a 100-Mbit/s service priced at $40 per month.
Usen has already signed up 3,400 subscribers and is now expanding its fiber-optic service area to include greater metropolitan Tokyo and other cities with populations of 1 million or more, which it plans to support starting in October.
Usen acts as the information provider for its 100-Mbit service, and does not allow other ISPs to connect to its network.
In a trial service that began last December, NTT offered a best-case service of 10 Mbits/s and set a monthly rate of about $258 at that time.
"Usen's business surely had some impact on NTT's pricing strategy," said Atsuo Takahashi, senior analyst at ABN Amro Securities (Japan) Ltd. "But at present Usen is skimming the cream off. Sooner or later, the company will reach the point where it cannot keep the low rate. NTT should not take Usen's service a big threat."
What can you get?
To demonstrate the capabilities of a broadband network, NTT recently launched a joint experiment with Dai Nippon Printing and Sharp Corp. The program is to last six months. .
"This experiment targets market creation. We are going to show images and videos that are not available through current networks and that will make consumers realize the service is worth paying for," said Shigehiko Suzuki, senior vice president of NTT.
A Japanese government project, dubbed e-Japan, intends to connect 10 million households to 100-Mbit/s networks and 30 million households to 10-Mbit/s networks by 2005. That level of penetration would involve more than 90 percent of Japanese households. "To realize 10 million households connected to broadband networks, it is really necessary to involve consumers widely," Suzuki said. "To demonstrate what the broadband networks can do will practically expand the market."
In the three-company experiment, DNP will serve as contents provider, Sharp will work on in-home terminals, and NTT will provide the network infrastructure.