FW-54 -- Fixed Line Frustrations: Japan's New Phone Deals

J@pan Inc Magazine Presents:

* * * * ** * F R U G A L W A T C H * * * * * * * *
A weekly roundup of how to be frugal in the world's most
expensive country to live (unless you read this!), written
and compiled by Wendy J. Imura.

Regular edition, April 26, 2005 Issue No. 54

- What's new (Fixed Line Frustrations: Japan's New Phone Deals)
- Event Notice: (Which Phone Plan to Choose?)
- Frugal tips (Landline to Cell-Phone Calling Tips)
- Credits

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+++ WHAT'S NEW (Fixed Line Frustrations: Japan's New Phone Deals)

Dear Frugal Readers,

Contracting local telephone service in Japan used to be a very
simple matter: Obtain the rights to a telephone line (either
through a rental service or purchase), hook up your line, and
pay NTT your basic fee every month. With the advent of
gradual deregulation, things have gotten pretty complicated.
After the 2001 introduction of the MyLine service, customers
can choose separate operators for long-distance services
(intra-prefecture, inter-prefecture, and international). However,
it wasn't until KDDI announced the launch of a competing
fixed-line local service to NTT's standard basic services in 2004
that competition finally entered the "basic service fee" market
in Japan.

Specifically, you can now choose between one of four operators
to provide local telephone service (the one which you pay a
basic fee of around 1,800-2,000 yen/month for, regardless of
how many calls are made). The new plans are called
"chokushu-gata" (direct-collection services). Unlike previous
"MyLine" discount plans (where an NTT contract was still
necessary), the "chokushu-gata" services connect directly to
your home line. While NTT still owns the physical fixed line
infrastructure, operators pay usage fees to NTT to "rent" the
lines (much luck ADSL services).

The major benefits of the new discount services are the fact
that the initial cost outlay for line construction is much lower
(between 1,050-2,310 yen for the three new operators' plans vs
38,640 for purchase of NTT "phone rights"), and lower monthly
fees (between 1,417-1,575 yen vs. 1,522.4-1,785 yen,
depending on the size of the exchange you are connected to).
The new basic fee services also offer a variety of discount voice
plans as well for local and long distance calls.

There are some disadvantages, however. There are presently
limits to service areas at the moment (as services have just
started), and some convenient 3-digit NTT phone services
may not be available. All emergency services (110, 119) are
available, as well as the Emergency Message Dial service.
The new basic service providers also have contracts with NTT
for maintenance, repair, and recovery in the event of an

There are a number of other attractive services available in
addition to these, however - such as IP telephony ('IP denwa'
in Japanese). Usually bundled together as part of an Internet
service, '050'-prefix services (bundled with ASDL providers
such as Softbank BB's BB Phone) are the current mainstay,
and offer such deals as free phone calls between members and
low voice rates overseas. A new type of IP telephony (utilizing
optical fiber) is also spreading, and allows users to maintain
their existing phone numbers. Providers for optical-fiber IP
telephony include K-Optico, NTT East/West, KDDI, Softbank
BB, and others, and a full-fledged service launch is expected
during 2005. Some cable TV companies (such as J-Comm) offer
telephone service bundled together with cable TV and Internet.

Regardless of what you choose, it's always good to know what
options are available. Check out the Bargain Roundup below for
a list of price plans and which plans are best for which types
of users.

Frugally yours,
Wendy J. Imura
(Note: Much of the information in this article was translated/
adapted from the April 16, 2005, edition of Fuji Sankei Group's
Living free newspaper.)

== Entrepreneur Association of Tokyo ・May Seminar ===

This coming May, Norio Murakami, President of Google Japan
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Date/Time: Tuesday, May 10th 7:00 pm
Location: City Club of Tokyo - Maple Room (Canadian Embassy
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Email: info@ea-tokyo.com

+++ BARGAIN ROUNDUP: Which Phone Plan to Choose?
Below is an outline of the four basic-fee service operators,
and their competiting price plans. I've also outlined which
plans are likely to be best for different users. Note that this
information is current as of 4/16/2005 for the Kansai, and
may differ for other regions.

NTT East/West Existing Service
Initial Line Construction/Startup Costs: 38,640 yen
Basic Monthly Fee: 1,522.5-1,785 yen
People who already own rights to a phone line (or can take
over someone else's for a very small fee) might do best to
stay with NTT. Calls to NTT DoCoMo mobile phones are
cheaper with NTT.

Nihon Telecom's 'Otoku Line' Service
Initial Line Construction/Startup Costs: 2,100 yen (includes
weekday line construction fee)
Basic Monthly Fee: 1,417-1,575 yen
Monthly Line Fee: 105 yen/month for 60 months

KDDI's 'Metal Plus' Service
Initial Line Construction/Startup Costs: 1,050 yen
Basic Monthly Fee: 1,470 yen
Monthly Line Fee: 105 yen/month for 60 months
Calls to au cell phones are cheaper with this plan.

Heisei DenDen's 'CHokka' Service
Initial Line Construction/Startup Costs: 2,310 yen
(Includes weekday line construction fee)
Basic Monthly Fee: 1,470 yen
Monthly Line Maintenance Fee: 63 yen/month
(Currently, access to '119' emergency service is not
available in some areas under this plan!)

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+++ FRUGAL TIPS (Landline to Cell-Phone Calling Tips)
*"I just received a leaflet from NTT describing their new 0036
service. If you dial 0036 before calling a cellphone from a
regular telephone, the rate will be discounted. The example
given on the leaflet gives the following rates for a 3-minute
call between 8am and 7pm.

"NTT land line to
Docomo -- 52.5 yen (compared to 70-90 yen without 0036)
au -- 57 yen (compared to 90-120 yen)
Vodafone -- 63 yen (compared to 120 yen)
Tuka -- 63 yen (compared to 120-150 yen)

To use this service, just dial 0036 and then the number.
eg. 0036-090-4444-5555" (SC #2236)

(In response):
*"The NTT rate 52.5 per 3 minutes appears frugal, but is it?
Here's something to think about.

"NTT's 52.5 yen per 3-minute increment may look attractive, but
the average call to and from a cell phone is well under 3 minutes
statistically for most people. Additionally, if you do go over 3
minutes, you're automatically charged another 52.5 yen for the
next 3 minutes whether you use it or not.

"You can call for '19 yen' in 1-minute increments with T-1
Communication 24 hours a day.

"The intention of this reply wasn't to make an advertisement, but
so many people are misled by what appears to be a good deal when
actually companies like NTT, Vodafone, Japan Telecom , etc end up
billing you for more over the month than you expect.
...which certainly doesn't decrease your bills."
(L1, #2239)
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Written by: Wendy J. Imura (frugalwatch@japaninc.com)
Edited by: JI

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