NTT Communications Corp. said Thursday that it will tie up with a U.S. firm to enter the Japanese broadband data market and offer Internet access over on digital lines.
The move will effectively pit NTT Communications against two regional firms within a group led by NTT Corp., which is promoting an inferior technology called the integrated services digital network.
Under the deal, NTT communications and California-based Covad Communications Co. will each pay 1.25 billion yen to acquire 41.8 percent stakes in Tokyo-based ACCA Networks Co. Venture capital firm Ignite Japan K.K. will pay 170 million yen for a 6.7 percent stake, with the five founding investors holding the remainder.
ACCA, set up in March, plans to offer DSL access services capable of sending data 10 times faster than ISDN.
In contrast, NTT East Corp. and NTT West Corp., the two regional calling firms of the NTT group, are trying to spread ISDN services across the country.
ACCA will launch pilot DSL services this fall in selected areas of Tokyo and plans to begin commercial services nationwide in early 2001.
The firm is reportedly planning to charge a fixed monthly fee of 4,000 yen or less, compared to 4,500 yen charged for ISDN services. It hopes to achieve annual sales of 40 billion yen to 50 billion yen three years from now.
Covad is a leading DSL broadband services provider in the United States and will assist ACCA in deploying broadband DSL networks in Japan.
The NTT group has been reluctant to promote DSL services because it has heavily invested in ISDN, which uses optical fiber networks.
NTT Communications has about 1.5 million subscribers, making it Japan's third-largest Internet service provider after Fujitsu Ltd.'s @Nifty and NEC Corp's Biglobe.