NTT forms new broadband business
By Reuters staff
29 June 2001
Japan's dominant telecoms firm, Nippon Telegraph and Telephone Corp (NTT), said on Friday it would deliver high-grade content through a new company that will use its fibre-optic Net access network.
The new firm, NTT Broadband Initiative Inc, will offer streaming content such as video and music, and provide a gateway for information that needs to be delivered via high-speed lines.
Fibre-optic networks allow homes and businesses to access the Internet and transmit data at speeds of 10 Mbps (megabits per second), or more than 150 times faster than regular dial-up modems, and NTT recently began retail services in limited areas.
"We made this company because it was inevitable that this was needed given the direction (of telecommunications technology)," NTT President Junichiro Miyazu told reporters.
NTT said it would create a network that would make multi-media services such as movies, software, online chatting, medical services, shopping and video games available to users through personal computers, televisions and other household appliances.
Miyazu said delivering the content via existing high-speed channels such as ADSL (asymmetric digital subscriber line) or mobile unit NTT DoCoMo Inc's third-generation wireless network was also being considered.
The company was set up on Friday and capitalised at 3.5 billion yen ($28 million), with 60 employees. Further funding from the parent company was also being planned, NTT Broadband Initiative President Hiromi Wasai said.
NTT, a former state monopoly that controls 90 percent of Japan's telephone network, recently cut its monthly fees for fibre-optic services to 5,537 yen per household from 7,898 yen.
OLD NETWORK STILL ALIVE
Also on Friday, NTT began its L-mode service, which puts a tiny Web browsing screen on telephones so that subscribers can access the Internet on their phones.
Similar to DoCoMo's i-mode service where nearly 25 million users browse the Web on business card-sized screens on cell phones, L-mode lets users check their e-mail, get news and other information that are generally limited to text and small graphics.
NTT had struggled to get L-mode started because regulators and competitors argued that its regional units NTT West Corp and NTT East Corp were encroaching into business areas not allowed under a law that split up the activity of NTT.
But industry players said that L-mode, which NTT hopes will help supplant shrinking revenue in its conventional fixed-line voice calling services, will have a hard time replicating the success of i-mode.
"It will take some time until it becomes really ubiquitous," said one industry player.
Electronic retail shops that are selling new L-mode telephones have reported scant customer interest and blamed the high price of the machines.
But NTT East, whose service area includes Tokyo, said it has already received several thousand applications for the service.
NTT is targeting 1.5 million customers in the first year and 10 million in five, and some have said this is possible since an estimated seven million subscribers buy new telephones each year.
Shares in NTT rose 3.5 percent to 650,000 yen, outperforming the benchmark Nikkei average, which gained 2.28 percent.
© 1999 Reuters Limited. All rights reserved.
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