IP Telephony in Japan

Financial Times has an story that shows the penetration of IP Telephony in Japan: NTT unit in talks on internet telephony: "NTT Communications, the long-distance and overseas telecommunications arm of NTT, is negotiating with six other telecoms carriers to connect their internet protocol (IP) networks in a bid to boost the use of internet telephony.


NTT Com said it had approached competitors KDDI and Japan Telecom and Fusion, as well as NTT-ME, a sister company, and Plala, an internet service provider, about connecting their respective IP networks. NTT Com expects to link up with NTT-ME and Plala by December.

The move highlights the growing use of IP telephony in Japan, where high phone rates have encouraged heavy users in particular to migrate to the cheaper service. IP phone services are cheaper to construct than conventional phone networks. Users are generally charged a flat monthly rate and users of the same service can call each other free.

NTT Com's move is expected to provide a significant boost to consumer awareness of IP phones, which are forecast to grow usage significantly over coming years.

Technological improvements and the start of several services have made IP phones an increasingly attractive alternative to conventional phones.

IP phone use is forecast to grow to 5.3m subscriber lines by end-2003, from 3.08m at end-2002, according to a study by Yano Research Institute. The research group expects IP phones to grow to 27.8m by 2007.

Conventional phone companies, such as NTT, had until recently resisted offering IP phone services, which threaten their traditional income source of fixed-line voice telephony.

However, the rapid spread of broadband, particularly ADSL, services, is forcing NTT and other carriers to provide IP phone services as part of their broadband offerings. ADSL service providers in Japan offer IP phone services as an incentive to sign on to broadband services."