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Japan Telecom considering offering local services.

TOKYO, July 4 Kyodo

The president of Japan Telecom Co., a provider of long-distance and overseas phone services, said Tuesday it might add low-priced local phone services to its lineup from next May.

''If we enter the field, we would like to kick off the service next May,'' Haruo Murakami told a news conference.

''Even though we might have a negative spread between costs and profits, we have a strong desire to provide those services,'' he said.

A negative spread occurs when the costs of providing a service exceeds its profits.

He said, ''Nippon Telegraph and Telephone Corp. (NTT) is cutting the fees'' it charges telecom carriers to connect to NTT's extensive intracity cable networks to provide subscribers with long-distance and overseas phone lines.

Japan Telecom, an affiliate of Japan Railway group companies, is a business ally in the Concert global telecom venture set up by British Telecommunications PLC and AT&T Corp.

Murakami said its envisioned services would match or even undercut the three-minute basic charge of 9 yen offered by two potential rival carriers -- Tokyo Telecommunication Network Co. (TTNet) and Kyushu Telecommunication Network Co.

TTNet, a subsidiary of Tokyo Electric Power Co., stormed into the domestic and overseas phone services market in 1998. Kyushu Telecommunication followed suit in 1999.

''If we were to offer our service at 10 yen per three minutes, it would not attract customers, as the charge would be identical to NTT's,'' Murakami said.

He suggested Japan Telecom may launch the intracity services simultaneously in as many cities as possible or at least minimize the differences in the timing of the launches.

''I question the wisdom of starting the envisioned services in Tokyo, Osaka and Nagoya at the same time, while putting off the start of the service in other cities to later dates,'' he said.
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Publication:Japan Weekly Monitor
Geographic Code:9JAPA
Date:Jul 10, 2000
Words:301
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