Competition opens up Japan's ADSL market

The number of ADSL (asymmetric digital subscriber line) subscribers in Japan skyrocketed to over 400,000 at the end of July, the Ministry of Public Management, Home Affairs, Posts and Telecommunications (MPHPT) announced Thursday. The figure is 10 times higher than the total number of subscribers five months ago.

The sudden growth in the ADSL service market in Japan started in June when Yahoo Japan Corp. declared a price war by announcing the launch of its ADSL service at 2,280 yen (US$18.70) per month. Until then, the average monthly fee for household ADSL service in Japan was over 5,000 yen, a price level maintained by dominant telecommunication carrier, Nippon Telegraph and Telephone Corp. (NTT).

Although Yahoo Japan has delayed the start of its low-price commercial service by a month, its entry into the market has contributed to lowering ADSL service charges by accelerating the competition between Internet access providers. NTT's two regional companies were the first to announce discounts on their ADSL access charges, soon after Yahoo Japan's announcement.

Seven other companies have followed with announcements of discounts in the last few weeks. By mid-September, all the services in Japan's ADSL market, including KDDI Corp.'s Dion, Fujitsu Ltd.'s Nifty and NEC Corp.'s Biglobe are expected to be ready to offer lower connection fees. The prices range from Yahoo Japan's 2,280 yen to 3,980 yen offered by Biglobe and Mitsubishi Electric Corp.'s DTI.

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