Softbank recently announced a decision to offer FTTH (Fiber-to-the-Home) service, which once again pits the new kid on the block against the long-time incumbent NTT. Softbank's FTTH service will offer broadband speed of one gigabyte per second, or 10 times the speed offered by NTT. The monthly fee established for Softbank's Yahoo BB fiber-optic service for individual home use is 7,234 Yen (US$66; US$1 = 110 Yen).

 

According to figures from the Internal Affairs and Communications Ministry, Japan had about 1.6 million FTTH subscribers as of the end of August 2004. NTT claims the overwhelming majority of subscribers in the fiber-optic sector, with a total of 1.16 million users. Other players include KDDI Tokyo Electric Power.

 

NTT enjoyed a virtual monopoly over the Japanese telecom market until three years ago when Softbank burst onto the scene with Yahoo BB asymmetrical digital subscriber line service. Softbank has been widely credited as the driving force behind the fierce competition that has lowered ADSL broadband access prices in Japan to among the cheapest in the world and increased the penetration rate to one of the highest in the world. Softbank has about 4.42 million subscribers to its ADSL service, while NTT East and West have a combined subscriber base of 4.66 million.

 

It is believed that Softbank's debut in the FTTH sector will not have as severe of an impact on NTT as did its initial entrance into the ADSL market. This is mostly due to the time-consuming deployment required for FTTH and the fact that Softbank has been unable to lower prices for FTTH as dramatically as it did with ADSL, owing to the high access charges imposed by NTT.