NTT could get permission to offer wireline/wireless bundle discounts

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Japan's communications ministry may lift the ban on former state-run incumbent telco NTT, giving it the ability to offer discounts for wireline and wireless service bundles, reports Nikkei Asian Review.

Today, NTT is not allowed to offer service bundles because the regulator is concerned that it could regain its over-dominance in Japan's telecom market.

Ongoing competition in the wireless and wireline space has driven down NTT's piece of the domestic mobile market to about 40 percent, prompting Japan's communications ministry to revisit the issue.

By allowing NTT to provide discounts on bundled services, consumers could see lower prices for DoCoMo's wireless service and the fiber to the home (FTTH)-based service provided by its NTT East and NTT West wireline subsidiaries. Interestingly, NTT's FTTH subscriber base has dwindled as more customers, particularly young adults, have flocked to LTE wireless services.

"NTT East and NTT West have been forced to slash their FTTH prices for new subscribers by an eye-watering 34 percent from ¥5,460 (U.S. $66.70) to ¥3,600 (U.S. $35) per month to try and re-ignite their subscriber growth and stop the outflow of subscribers to cheaper LTE mobile broadband service," wrote Tony Brown, senior analyst with Informa Telecoms & Media, in a 2012 blog post.

The communications ministry said that it would create a panel where rivals such as KDDI and Softbank would be able to discuss and comment on any bundle proposal. It expects an overhaul proposal to come by November and legislation to follow in 2015.

Lifting the ban does not sit well with KDDI and SoftBank, both of which argue that NTT should be required to give them and other rivals access to their last-mile fiber networks.

For more:
- Nikkei Asian Review has this article
- see this Informa Telecoms & Media blog post

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