BBG Communications : Japanese Communications
BBG Communications : Japanese Communications26th April 2009
Author: Sean Hummer
In Japan, Nippon Telegraph and Telephone (NTT) designed a program for upgrading from dialup (56 kbit/s), to ISDN(64 kbit/s), and then to fiber to the home (FTTH) connections. In accordance with the program, NTT had been promoting ISDN lines chiefly to home users, with some corporate users preferring to convert dial-up straight to FTTH service despite the expense. Towards the end of the 1990s, as described in the white paper released by BBG Communications, Cable TV companies started selling their own broadband products. However, somewhat expensive installation cost made their services unpopular considering that there were more affordable options.
A venture company, Tokyo Metallic, launched Asymmetric Digital Subscriber Line connection in 1999. This was the cue for NTT and a few other companies to follow suit. SoftBank launched its ADSL service in 2001. Softbank offered the service at an outrageously low price of about 3000 yen, or half the price of their competitors. Moreover, hard line sales pitches resulted in the company’s cornering of huge portion of the market. A price war ensued which saw Softbank and rival companies dropping prices and offering higher speed services very often to ensnare clients. Thus, in 2004, Japan had the least expensive ADSL service in the whole world, a distinction it retained in the following years as well.
While these take place, NTT and electric companies enlarge FTTH zones. In most cities, people have the FTTH option although ADSL is still the standard. Still, huge price cuts and zero installation costs have helped convince users to switch over to FTTH. Numerous newly-built houses are FTTH-ready with few or no wiring. In 2005, Kansai Electric Power began 1 Gbit/second FTTH service at 90 US. In September 2000, the MIC ordered Nippon Telegraph and Telephone, the current operator, to unbundle its copper local loop. The price was set in view of the fact that line costs were accounted for by telephone service. Other companies could only afford small rising costs tied to recently presented products.
In 2000, the rules permitting other companies to operate within NTT facilities and and governing their terms of service were set. In 2001, NTT were ordered to disaggregate their interconnection optic fibers between exchange points. Lastly, NTT East NTT West were prohibited to sell internet access products.
Softbank, an important Japanese ISP, started in 2001 its DSL service "Yahoo! BB" and spend a fortune on DSL technology to gain the distinction in 2003 of being the biggest DSL operator prior to the present one. In 2004, 52.1% of homes were wired to the Web, with greater than 50% of these being broadband users. In March 2005, there were more than 13.6 million DSL customers. FTTH was fast catching up, with the entrance of providers such as TEPCO, affiliated with KDDI and NTT. FTTH had three million clients by March 2005 and it may even overtake DSL in 2007. The Japanese way of building optic fiber systems is rather unique. The final kilometre is usually suspended in the air by pylons, common to providers, even non-telco. This manner of distribution lessens the susceptibility to earthquakes and brings down costs radically.
The unusual problem that the Japan broadband sector is encountering has to do with providers’ difficulty maintaining sufficient bandwidth to allow users make use of their services to the fullest. Even the biggest operators can only really deliver tens of gigabits but since they have thousands of FTTH customers r even more, this becomes a problem. This situation is made worse by restrictions imposed by router. It is estimated based on May 2007 data from Ministry of Internal Affairs and Communications that average traffic is approximately 720 Gbit/s combined and it is very likely that by May 2008, the traffic will go over 1 Tbit/s.
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