Telecommunications operator Fusion Communications Corp. plans to begin a new Internet protocol-based telephone service that will minimize the use of switching equipment used by Nippon Telegraph and Telephone Corp., company officials said Wednesday.

The new service will see less traffic through NTT's exchanges than conventional IP telephone services, thereby leading to a sharp reduction in phone charges, the officials said.

Fusion has yet to decide on charges for the new service, but Internet phone service rivals are charging or planning to charge fees of between 7.5 yen and 10 yen for every three minutes.

Fusion officials said this would be the range they would target, adding they are also considering making calls between users of the new IP phone service free of charge.

Conventional IP phone services operators lease lines from NTT to connect subscribers with NTT's telephone offices while linking the offices through their own phone lines.

As the operators are required to pay set charges to NTT for the use of its lines, sharp cuts in phone charges are difficult.

At present, the charges are 20 yen for three minutes for IP calls within Japan.

Fusion's new service will be offered to subscribers of asymmetrical digital subscriber line services offered by Internet access service providers that have tied up with Fusion.

As the new service will use equipment to connect ordinary phones and IP phones to ADSLs, it can minimize the use of NTT's switching equipment.

Fusion, which has some 1.7 million subscribers to its conventional IP phone service, has almost completed hookup tests in cooperation with phone makers such as Iwatsu Electric Co., Mitsubishi Electric Corp. and Oki Electric Industry Co.