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Japan's NTT wins fee increase
TOKYO, Japan (Reuters) -- A government advisory panel on Friday approved a Telecoms Ministry proposal to raise fees paid by carriers to use Nippon Telegraph and Telephone Corp's networks. The move effectively seals NTT's first fee increase in a decade. The plan, which will likely bolster the dominant telecoms carrier's flagging earnings at the expense of its rivals, would boost access fees at NTT's two regional units by 4.8 percent on a weighted average. The units will receive an estimated 400 billion yen ($3.33 billion) in access fees for the business year ending on March 31. The ministry's proposal includes a 12 percent rise in fees to access NTT's regional networks for two years from April and a three percent cut in the interconnection fees for its local networks. The rise would be the first in NTT's access charges since the current interconnection fee system was introduced in 1994. While boosting revenue at NTT, the fee increases are expected to squeeze profits at new entrants. The current charges are already twice as high as U.S. and European levels by some standards. Eighteen major telecoms carriers operating in Japan, including KDDI Corp and Britain's Cable & Wireless Plc, earlier this month urged that the proposed increases be rejected, saying the move could restore the monopoly status NTT enjoyed as a fully state-owned entity nearly 20 years ago. Since NTT still owns most telephone lines running into homes and offices, other carriers need to connect their lines to the NTT network to serve their customers. But NTT's regional units, battered by fierce price competition, an exodus of customers to mobile phones and growing use of cut-rate Internet protocol (IP) phones, are keen to bolster their profitability. Shares in NTT ended Friday down 0.47 percent at 427,000 yen, compared with a decline of about 1 percent for the Nikkei 225 average. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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