December 18, 2001, 10:50 AM — Softbank Corp., Yahoo Japan Corp. and BB Technologies Corp. announced plans Tuesday to get into the telephony business, unveiling a new IP-based telephony service in Japan that charges a single rate for all calls within Japan and to the U.S.
The three companies said the new service, which will begin operations in April, will charge customers 7.5 yen (US$0.06) per three minutes for calls to anywhere in Japan or the U.S. At present, Japanese consumers pay around 8 yen per three minutes for local calls, higher for long distance and higher still for international calls.
The service will be available to customers of the Yahoo BB broadband Internet access service, an ADSL (Asymmetric Digital Subscriber Line) service operated by BB Technologies.
The pricing of the new service is very aggressive compared to existing options.
A three-minute call to the U.S. using KDDI Corp.'s international direct dial service costs between 120 yen and 180 yen depending on the time of day; Softbank is offering three minutes of chat for the same price as around ten seconds via KDDI. Internet telephone services, which are a popular cheaper alternative, are also several times more expensive. Jens Corp., a unit of Japan Telecom Co. Ltd., charges between 43 yen and 57 yen for a three-minute call to the U.S.
In setting these head-turning prices, Softbank is following the same path it took when it launched a broadband Internet service in October. At a time when ADSL connections were priced at 3,000 yen or more per month, it announced a service at 2,000 yen and promptly began winning over prospective customers from other service providers. The result was a clear win for consumers: prices tumbled and now a handful of major providers are matching Softbank's rate.