Internet connectivity service charges poised to fall further

Internet connectivity service charges in Japan are poised to fall further amid intensifying competition. In June, Yokohama-based JAPAN ITS, an international long distance discounter, will move into the service provider market, offering a members-only dialup connectivity service priced at only 12,000 yen ($114) per year. The company says it will maintain quality by limiting the number of members. It will initially offer services in Tokyo, but plans within two years to expand to Osaka, Nagoya, Fukuoka, Hiroshima, Sapporo, Sendai, Yokohama and Okinawa.


Advertising-supported service may drive Internet fees down

Internet usage fees may be driven down further if a franchised, advertising-supported Internet connectivity service concept planned by HYPERNET of Tokyo gets off the ground. HYPERNET developed browser-resident software called Hot Cafe (sound familiar?) that continuously displays advertising messages in a browser's window. The company plans to team up with ISPs and franchise a system of advertising-supported Internet connectivity services that can be offered to consumers for free or at very low cost. Advertisers would benefit by capturing detailed demographic information on users who download the Hot Cafe-equipped browser, then creating targeted messages essentially guaranteed to reach users of the browser.


SOFTWARE JAPAN to offer weekend, evening Internet access at 800 yen per month

Tokyo-based SOFTWARE JAPAN, a leading seller of PC products, plans from July to offer an Internet connectivity service that will allow users unlimited access on weekends and evenings for only yen800 ($7.55) per month. When used in combination with NTT's low-cost Telehodai night discount service, customers will be able to access the Internet from eight PM to eight AM on weeknights and all day Saturday for a fixed monthly fee of 800 yen. SOFTWARE JAPAN will operate the service as a subprovider of TOKYO INTERNET, a company in which it holds a capital stake.


NTTPC COMMUNICATIONS cuts dedicated Internet access rates

Tokyo-based NTTPC COMMUNICATIONS lowered its dedicated Internet access line rates an average of 40% effective April 1. Rates on 64Kbps and 128Kbps, in particular, were slashed more than 41%, to 123,000 yen ($1,139) and 196,000 yen ($1,815) per month, respectively. In step with the rate cuts, NTTPC also introduced experimental frame relay, roaming, and e-mail-to-facsimile output services.


Internet televisions under development by SHARP, VICTOR, others

Televisions equipped with the ability to view the Internet are likely to hit the market in Japan this summer. SHARP, VICTOR COMPANY OF JAPAN, MITSUBISHI ELECTRIC, and MATSUSHITA ELECTRIC INDUSTRIAL are all developing TVs that enable even those without PC knowledge to readily connect to the Internet, at hardware prices only 20,000-30,000 yen ($190-286) over ordinary television sets, industry analysts say. The sets will have the ability to navigate the Internet using a remote control device, and the ability to send and receive e-mail. The manufacturers foresee a first year market for approximately 500,000 sets.


MAP JAPAN releases Internet card good for 100 minutes of connectivity

Tokyo-based MAP JAPAN has released the Jungle Internet Card, a prepaid card that will allow the user 100 minutes of Internet access without paying setup fees or applying for IDs or passwords. Each card will have a telephone number, ID, and password printed on the back, enabling the purchaser to immediately call and make use of the Internet without going through dedicated service providers. Like the telephone cards that are popular in Japan, the Jungle Internet Card can be designed with corporate logos or illustrations and given away as a novelty gift or as an advertising piece. MAP JAPAN hopes to sell 200,000 of the 1,000 yen ($9.52) cards the first year.


DYNANET SERVICE ASIA starts Internet connectivity service business

Tokyo-based DYNANET SERVICE ASIA, the Japan unit of Taiwan-based information service DYNALAB, started an Internet connectivity service business March 15. The company is using DYNALAB's databases to provide political and economic information from China, and will build Chinese language Web sites and perform other services on behalf of clients in Japan. The company distributes a Chinese-capable browser free of charge to all subscribers.


GRAPAK JAPAN to offer home page development at 9,700 yen per page

Commercial printing and software development firm GRAPAK JAPAN of Tokyo will start offering a service whereby it will create home pages on the World Wide Web for individuals at a rate of 9,700 yen ($92) per page. Corporate Web site pages generally cost between 50,000 and 80,000 yen ($476-762) per page in Japan, but GRAPAK will use special software to greatly reduce the work involved, and focus on the individual user market. The company will soon open its first service counter for the new offering at LAOX's PC store in Tokyo's Akihabara district.


ITOKI to launch Internet-based office furniture mail order business

ITOKI, a leading mail order seller of office furniture, will in May open Japan's first Internet-based office furniture mail order business. The company will use secure electronic transaction methodology developed by NIHON INFORMATION SYSTEM (NIS), a company in which it holds a capital stake. ITOKI has been hit hard by sluggish sales to large corporations, which account for 65% of its revenues, and now wants to open a new marketing channel focused on smaller offices and individual users.


Two strong candidates for Wasting Taxpayer Funds Award appear

Tokyo-based CASTANET will team up with software developer PICASSO to launch a new "Digifarm" service on the Internet in May. Users of the service will purchase digital "seeds" for about 3,000 yen ($29), which they can then "plant" online, subsequently tending their "digital gardens" at regular intervals. Depending on the skill with which their gardens are tended, users will receive actual produce, including eggplant, cucumbers, and celery, at "harvest time." (This story appeared March 5. Believe it or not, this scheme is eligible for funding by the Ministry of International Trade and Industry's (MITI) Network Business 21 project.)


COMMENTARY

Prices for Internet connectivity in Japan keep dropping, both for dialup and dedicated access. Between March 12 and April 2 - the space of 21 days - the lowest monthly rate for a dedicated 128Kbps line dropped from $2,171 to $1,815, according to newspaper reports. By the time you read this, of course, all the above information will be out of date.

At this point, dialup rates in Japan are even cheaper in some instances than they are in the U.S. (see top story on JAPAN ITS). The expensive part of enjoying Internet access in Japan is the 10 yen ($0.09) cost per three minutes that consumers must pay NTT for local telephone service. But this charge is levied on all telephone calls, not just calls to Internet service providers, so consumers are used to paying it, however grudgingly. And off-peak, fixed-rate calling programs that take much of the sting out of heavy user phone bills are now available (see SOFTWARE JAPAN article above). Most important, real telecom deregulation is inevitable in Japan, even though the pace of change continues to disappoint.

Signs of the times - NTT and other telephone service providers are now advertising call waiting services for the home that "won't disrupt your enjoyment of online services." Ordinarily, using a modem over a line that has call waiting can result in disrupted transmissions when another call comes in. NTT and its competitors are well aware of the rapidly growing number of customers who are accessing the Internet and other online services from their homes. The ads can be seen in the Nihon Keizai Shimbun, Japan's equivalent of the Wall Street Journal.

JIR correspondent Brent Bossom of Tokyo (jp000035@jp.interramp.com) writes:

"With all the hype surrounding the Internet in Japan today it's not only computer companies that are trying to cash in. From brewers (Suntory) to broadcasters (TBS, NHK, etc.), everyone wants to make the connection.

The Internet is even being used to sell housing. A recent newspaper ad for a condominium complex outside Tokyo listed its benefits as: close proximity to a train station, no down payment and low monthly payments, and 'Internet-ready.'

A quick phone call to the developer, however, revealed that this simply meant the condos come with two analog telephone lines. While this definition of 'Internet-ready' might be open to argument, there is no question that marketers now see any association with the Internet as being an asset."

JIR makes no attempt to provide comprehensive coverage of Internet-related developments in Japan - just to offer some thought-provoking news and commentary. Those readers interested in comprehensive coverage of electronics industry and Internet-related developments in Japan will do well to check out Digitized Information's services. Call 33465-7069 or fax 33465-7079 in Tokyo or drop a line to: diginfo@gol.com

Tim Clark
Editor


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