Press Releases (SoftBank Telecom Corp.) 2004

Launch of Fixed Telephone Business Using SOFTBANK Group's Communications Network
- Installing Own Switching Equipment and Creating a Nationwide Communications Network Independent of the NTT Switching Network -

August 30, 2004
SOFTBANK Group

JAPAN TELECOM CO., LTD. (Head office: Chuo-ku, Tokyo; Director, President, and CEO: Hideki Kurashige; "JAPAN TELECOM") of SOFTBANK Group (President and CEO: Masayoshi Son) has announced the launch on December 1, 2004 of the discount fixed telephone service, Otoku Line, using its own communications networks and facilities. In this way, SOFTBANK Group will have its own communications network that is independent of the NTT switching network. SOFTBANK Group will start accepting orders for Otoku Line from September 1 this year.

1. Purposes of the Otoku Line Business

1. Securing Income from Basic Charges

JAPAN TELECOM will provide customers with basic services using its own communications network. It will also collect the basic charges and secure them as income.

2. Reducing the Expenses for Call Access Charges by Half

The installation of its own switching equipment means there is no need for the access charges for outgoing calls that JAPAN TELECOM pays to NTT when providing the My-Line service, reducing the expenses by half.

3. Securing Income from the Access Charges for Incoming Calls

When calls are received from other carriers via the JAPAN TELECOM communications network, it is possible to secure the income of access charges to be paid to JAPAN TELECOM.

4. Securing Income by Providing Optional Services

It is expected that an income can be derived from optional services, such as touch-tone lines, caller ID display, dial-in and call diversion.

5. Securing Income from All Calls by Providing Full Line Services

It is possible to place a call to fixed telephones, cellular phones, PHSs and IP phones as well as make international calls. This will achieve the same service level as that of NTT's fixed telephones.

2. Overview of Otoku Line

JAPAN TELECOM will connect its own switching facilities installed in NTT's station premises to customer's premises via Type 2 dry copper circuits. The company will connect it to its own communications network deployed between the NTT station premises, so that it will create and maintain its own communications network that is independent of the NTT communications networks (*See the conceptual diagram below.)
The Otoku Line Service to be provided by the communications networks will be available across the nation. It will be expanded from the 1000 station premises when the service is launched to 3500 station premises by the end of 2005. It covers the basic functions as well as optional services provided by the existing fixed telephones, such as emergency calls, touch-tone lines, caller ID display, dial-in and call diversion.

3. Features of the Otoku Line

1. Discount Call Charges

Like JAPAN TELECOM's My-Line, the call charges are discounted by up to 55% for business use, and up to 50% for residential use from the regular JAPAN TELECOM charges.

2. Discount Basic Charges

Because JAPAN TELECOM's communications networks and facilities are used, the basic charges are 200 yen below the conventional NTT basic charges.

3. No Need for Telephone Subscriber's Rights

When applying for Otoku Line, it is not necessary to have telephone subscriber's rights. (NTT's telephone subscriber's rights: 72,000 yen)

4. No Need to Change the Current Telephone Number (Introduction of Fixed Telephone Number Portability)

It is possible to use the current telephone number.

5. Stable, High-Quality Fixed Telephone Services

A range of services are available, including emergency calls, optional services, touch-tone lines, caller ID display, dial-in, and call diversion.

6. Integrated Payment

Basic charges will not be billed by NTT regional companies. Both the call charges and basic charges are billed by JAPAN TELECOM only. Consequently, it is simple and easy to make a payment, and to understand and manage telephone charges.

7. No Need for the One-Off Payment of NTT's Installation Fees in Otoku Line.

There is no need for the one-off payment of installation fees of up to 15,414 yen required when you subscribe for new telephone services. (Each month, 100 yen is billed for the NTT installation costs.)

4. "Otoku Line" basic charges (for each subscriber line)

Class 1 Service Area Class 2 Service Area Class 3 Service Area
Analog office ¥2,205 (¥2,100) ¥2,362 (¥2,250) ¥2,520 (¥2,400)
residence ¥1,417 (¥1,350) ¥1,470 (¥1,400) ¥1,627 (¥1,550)
ISDN64 office ¥3,601 (¥3,430)
residence ¥2,761 (¥2,630)
  • *Tax is not included in parentheses.
  • *¥100 per month is required for 60month as NTT's installation fee.
  • *Class breakdown: First Class- less than 50,000 subscribers message area(MA). Second Class- 50,000 -400,000 subscribers message area(MA). Third Class- more than 400,000 subscribers message area(MA).

5. Otoku Line Sales Campaign

With the launch of the Otoku Line Service, JAPAN TELECOM will conduct a campaign to offer the following privileges to customers who apply for the service.

1. Free Calls to Three Telephone Numbers

Call charges to three telephone numbers nominated by the customer are free for a year from the first month of the service.

2. 90% Discount for Call Charges during Specified Hours

For long distance calls to be made during specified hours, call charges will be discounted by 90% from regular call charges for one year from the first month of the service. (*For business use: 19:00 to 23:00 on weekdays; for residential use: 19:00 to 23:00 on Saturdays, Sundays and national holidays)

3. Free Installation Fees and Monthly Usage Charges for Optional Services

Installation fees for optional services such as touch-tone lines, caller ID display, dial-in, and call diversion are free of charge.

Monthly usage charges of optional services are free of charge up to three months from the first month of service.

4. No JAPAN TELECOM Installation Fees

JAPAN TELECOM installation fees of 1,050 yen including tax are not necessary when you apply for the service.

To establish the service, JAPAN TELECOM will actively engage in advertising activities, and at the same time, conduct sales activities through a range of channels, such as corporate sales, telemarketing, door-to-door sales and sales over the Web. The SOFTBANK Group will strengthen the management base for the future, and expand the customer base to apply for new services in the future.

New Common Carriers (NCC) including JAPAN TELECOM have entered the communications business since the deregulation of communications in 1985. However, NCC provided the services in the communications transit business, and the place of contact between fixed telephone users and communications circuits (Last One Mile) was left to NTT regional companies. Consequently, many customers needed to pay basic charges to NTT regional companies and call charges to communications transit companies separately. Moreover, while the call charges have been reduced to one tenth or less for about 20 years, basic charges have been increased by 10%.

As a result of gradual deregulation and progress in the communications industry, such as the advent of dark fibers and dry copper wires, and with the introduction of number portability, the SOFTBANK Group is now able to enter the market as a fixed telephone carrier that can freely control basic charges and provide its customers with better services. The SOFTBANK Group will therefore provide a range of new services with higher usability in preparation for the age of optical communications in the near future.

Reference

"Otoku Line" conceptual diagram (In case of Otoku Line User calling non-Otoku Line User)

About SOFTBANK CORP.

Head office location 24-1, Nihonbashi-Hakozakicho, Chuo-ku, Tokyo
Representative President & CEO Masayoshi Son
Paid-in capital ¥162.3 billion
Founded September, 1981
Principal lines of business Broadband infrastructure, e-commerce, e-finance,media and marketing, broadmedia, Internet culture, and technology services

About JAPAN TELECOM CO., LTD.

Location 7-1 Hatchobori 4 chome, Chuo-ku, Tokyo
Representative Director, President and CEO Hideki Kurashige
Paid-in capital ¥66.2 billion
Founded October, 1984
Principal line of business Fixed-line telecommunications

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  • The information is true and accurate at the time of publication.
    Price, specification, contact and other information of products and service may be subjected to change. The information contains certain forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.
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