A Ray of Hope for Japan's Net Users

Back to Contents of Issue: March 2000

by Norio Ono

This looks to be the year of ADSL in Japan's Net-access scene. Maybe.

ADSL is a form of flat-monthly-rate, high-speed Net access catching on bigtime in the US. Credit for it being about to take off in Japan -- where per-minute charges have stifled the industry -- goes in part to a feisty Net access provider called Tokyo Metallic Communications, which overcame resistance from powerful NTT operating companies to permit the technology to run over their networks. Now that TMC has broken down the doors, other firms -- including Japan Telecom, KDD, and DDI -- are expected to compete in the new space. TMC and, of course, NTT East/West are the first movers.

"ADSL is the most promising technology for realizing high-speed Net access in Japan," says Masujiro Matsuo, managing director at Japan Telecom, comparing it against optical fiber, wireless local loop, wireless LAN, and cable. "And the use of ADSL will drastically increase," he adds, "once the end user's monthly charge drops below ¥5,000."

Lower prices will be helped along by ADSL becoming an international standard (likely to happen this year), since mass production of related products will be more feasible. But the reality is that monthly prices will depend largely on how much the NTT companies charge the ADSL providers for the privilege of connecting to the NTT network.

As long as ADSL remains pricey, the service will likely prove more popular with small and home-based businesses than with regular Net users. Another obstacle: ADSL has a limited service area because much of the NTT system has already been changed to optical fiber (ADSL runs over copper phone lines). For these reasons, analysts predict Japan's ADSL market, even in 2003, will be less than ¥10 billion.

Still, for the weary Internet users of Japan, drained from years of paying NTT per-minute charges, any news is good news.

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