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| A New Price War Erupting in the Form of IP Phones |
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Various cellar phones line in a store |
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NTT was able to mark record ordinary income in its consolidated financial statement for FY2003. However, NTT DoCoMo was responsible for almost all of the consolidated operating earnings, and its regional and long-distance sister companies saw sluggish growth. It is unavoidable that the earnings of these companies will change for the worse once the impact of its streamlining activities disappears. |
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Rivals Softbank and KDDI have announced that it plans to launch new nationwide fixed-line dark-fiber telephone services. They are aiming to procure NTT customers by lowering basic subscription charges. NTT countered these moves by announcing that it will lower its basic charges from January 2005. A further downturn in NTT's earning power is therefore expected. Furthermore, if IP phones, which utilize the broadband environment, come into widespread use, revenues gained through phone charges are certain take a further hit.
NTT has come up with the resonant communication network architecture (RENA) initiative, which utilizes the bi-directionality and high speed of fiber optics. Shifting from a fixed telephone network to an IP network while continuing to provide "universal services" (something that it is strapped with) will not only be a new challenge for NTT but also a fight against time. |
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| New Mobile Phone Services through 3G Mobile Technology |
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While mobile phones have become a prevalent means for accessing the Internet in Japan, 3G mobile technology is also being offered ahead of the world through WCDMA, CDMA20001X, and other third-generation technology. Mobile phones can now be used as video phones or for high-speed data transmission. Payment functions embedded in a phone have introduced services that allow users to use their mobile phone as a "virtual wallet." Reception of television broadcasts by mobile phones is another newly introduced service. The possibility that mobile phones will become an effective information terminal in the ubiquitous age is starting to surface.
Mobile phone carriers have been consolidated and reduced to three carriers: NTT DoCoMo, the KDDI Group's au, and Vodafone. In September 2004, the Softbank Group announced its entry into mobile telephony in the 800MHz band; and there are also signs of a move to enter the mobile phone carrier market by utilizing TDCDMA technology in the 2GHz band.
Mobile phone subscribers in Japan already exceed 80 million users; growth in new subscriptions has peaked. The general view is that entry by the Softbank Group will result in the eruption of a price war as it moves to seize market share from existing mobile phone carriers.
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