NTT looking to win one million subscribers to OCN by 1998 or 1999

NTT will seek by 1998 or 1999 to win one million subscribers to the Open Computer Network (OCN), a new Internet connectivity service it will launch early next year. The domestic telephone giant hopes to secure a 20% share of the domestic Internet access provider market and rack up annual revenues of approximately 100 billion yen ($934.6 mil) from OCN in fiscal 1998. It intends to have several million subscribers by the year 2000. OCN will offer everything from dedicated 1.5 Mbps access to dialup connectivity under a comprehensive service menu that is likely to threaten smaller Internet access providers.


DENTSU, SOFTBANK to establish new company that will create, sell online advertising

DENTSU, Japan's largest advertising agency, will team up with SOFTBANK to establish on July 1 CYBER COMMUNICATIONS, a new company that will specialize in creating and selling advertising on the Internet and commercial online services. DENTSU and SOFTBANK will hold 51% and 49% stakes, respectively, in the new enterprise,which will be capitalized at 100 million yen ($943,396). The new partners will strive to achieve revenues of 400 million yen ($3.8 mil) and 10 billion yen ($94.4 mil) in fiscal 1996 and fiscal 2000 respectively from the new entity, which they claim will be the first dedicated "net advertising" company in Japan.


NEC, NRI to interlink online services

NEC and NOMURA RESEARCH INSTITUTE (NRI) will interlink their online services effective June 1. Users of NRI's Denkatsu Club online shopping service will be able to subscribe to PC-VAN, NEC's commercial online service, while Denkatsu Club merchandise will be offered in a special section of PC-VAN. Through the interlinking arrangement, the two companies hope to increase their customer drawing power and improve service to subscribers. NEC claims that it now has over 1.7 million subscribers to PC-VAN.


IDC bracing itself for turbulent turn-of-century telecommunications market

International long distance carrier IDC has launched Beta Project, a team of in-house and outside analysts who will strive to position the company to adapt effectively amid end-of-the century turbulence in the rapidly-changing telecommunications industry. IDC foresees slow growth in conventional international telephone traffic, increased competition and falling rates, liberalization of rules affecting public-to-private and Japan-to-overseas connections, rapid growth of the Internet, and changes in key laws affecting KDD, Japan's leading overseas telecommunications carrier. IDC has charged the Beta Project team with developing appropriate business strategies for the new century, including new pricing targets, by April of 1999.


GrR HOMENET to guarantee online transactions

Tokyo-based GrR HOMENET, a company that from October will start a new network service business encompassing Internet access, online shopping, game and other services, plans to guarantee the integrity of online transactions in a bid to win users. The company says it will guarantee both product delivery and the safety of credit card information transmitted over its network. The unusual guarantee policy is designed both to alleviate user concerns about security and reliability, and reduce the amount of administrative work involved when online tenants sign agreements with credit card companies.


BLUESTAR to start new business reworking Web sites

Tokyo-based BLUESTAR will start a new business reworking and improving corporate Web sites. While a growing number of Japanese companies are going online, two-thirds of all corporate sites get less than 1,000 hits a day, according to a recent survey by the Nikkei group. BLUESTAR will update content, propose and implement traffic-building features, and provide other related consulting services. (Judging by the content of many Japanese Web sites, this company should be swamped with work! - Editor)

JAPAN ITS to offer free Internet access to individuals

Discount international telephone service provider JAPAN ITS of Yokohama will from August start an Internet connectivity service business that offers free Internet access to individuals. The new service, designed to counter ASCII's Hyper Net advertising-supported free Internet service, will be made possible by charging corporate customers and limiting the number of free personal accounts, according to JAPAN ITS. JAPAN ITS initially planned to offer individual Internet access for 12,000 yen ($111) for an entire year. The appearance of two no-fee Internet connectivity providers is certain to intensify already ferocious price competition in the Internet connectivity service business, say observers of Japan's online scene.


NEC planning to ship more than ten million PCs worldwide in fiscal 1997

NEC has announced its plans to ship more than ten million PCs worldwide in fiscal 1997 under its partnership with PACKARD BELL of the U.S. PB-NEC, the new entity that will orchestrate the global effort, will get underway July 1. Together, NEC and PACKARD BELL shipped 7.6 million PCs in the year through March, 1996, and plan to boost this figure 22% to 9.3 million units in fiscal 1996. The partners plan to commonize components and combine manufacturing operations to cut costs and boost efficiency, then become the first corporate group to deliver more than ten million PCs in fiscal 1997. NEC shipped three million units in Japan and 600,000 units overseas in fiscal 1995.


ITOCHU, IIJ to start Internet connectivity service in Taiwan

ITOCHU and INTERNET INITIATIVE JAPAN (IIJ), the nation's largest Internet connectivity service provider, will establish a joint venture in Taiwan in October as a first step in providing Internet connectivity services throughout Asia. The new joint venture, to be headquartered in Taipei, will be capitalized at approximately 65 million yen ($596,330). ITOCHU and IIJ will each hold 20% stakes, while AIH, an affiliated company that manages Internet links between Japan and Asia, will hold a 30% share. The remainder of the new company's stock will be owned by SUMITOMO and local interests in Taiwan. Currently, Internet traffic between Taiwan and Japan must travel to the U.S. via connections offered by SPRINT and others, but ITOCHU and IIJ hope to make Japan into the key hub for Asian Internet activity.


Coin-operated "Internet machines" to appear in coffee shops, karaoke clubs

Tokyo-based MEDIC has developed a coin-operated, dedicated Internet terminal that will start appearing in coffee shops and karaoke clubs in Japan. The 698,000 yen ($6,404) device accepts 100 yen ($0.92) coins that allow the customer to use the device as he would a game machine, for between three and six minutes. The time period can be freely set by the owner. The boom in Internet usage in Japan has produced a new twist on the coin-operated game player idea, and MEDIC's new Internet device can now be used at places such as Liverpool, a karaoke room in Tokyo's trendy Shibuya district.


Commentary

It's a well known paradox of the Internet that the same trunk lines that carry your fee-for-service long distance telephone calls also carry your e-mail messages at no cost. The world's telephone companies, perhaps forseeing that free or minimal-cost global telephone service may become a reality sooner than they expected, appear to be moving to secure a new way of extracting $20 per month from everyone who subscribes to standard telephone service - but this time charging for Internet connectivity rather than local voice service. Now Japan's domestic telephone monopoly, NTT, appears to be doing exactly this.

In a move that parallels AT&T's offer to provide free Internet access to its 80 million subscribers, NTT will early next year launch the Open Computing Network (OCN), basically a comprehensive Internet access connectivity service. By providing unlimited, dedicated 128 Kbit/s access for $300-400 per month and dialup ISDN for about $30 per month (planned rates), NTT will greatly undercut the prices charged by many commercial Internet access providers. Only time will tell whether the domestic giant can avoid the initial blunders committed by AT&T in the U.S., but there's no question that NTT is poised to dominate Japan's Internet connectivity service business.

Online transactions by Japanese consumers picking up

Starting early this month, we noticed a distinct increase in the number of online orders placed by Japanese consumers with our clients who offer secure credit card transaction functionality (Netscape Commerce Server). One new client is closing 5% of the visitors to its site: in other words, one in 20 visitors is providing her credit card number and personal particulars to make a purchase (we say "her" because in this case the majority of the buyers are women).

While we can't claim our experience reflects Japan's online market as a whole, we foresee a basic change in the Japanese Internet user's attitude toward online shopping - one that's in tune with the implications for the U.S. market presented by the excellent "Selling in Cyberspace" report in the 6/17 edition of the Wall Street Journal. Highly recommended reading.

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Some of you may notice strong similarities between articles in this report and stories that appear in Computing Japan. That's because we supply a number of high technology and Internet-related articles to Computing Japan each month.

Tim Clark
Editor


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JIR is co-sponsored by Digitized Information, Inc. of Tokyo, a leader in providing daily English language coverage of electronics industry developments in Japan.