NTT Firms Apply for L-Mode Service Licenses

[JAPAN] Japanese regional carriers NTT East Corp. and NTT West Corp. yesterday formally applied for government approval of their controversial L-mode home phone Internet access service.

L-mode, intended as a fixed-line version of NTT DoCoMo’s immensely popular i-mode wireless Internet access service, obviates the need for a personal computer by enabling dial-up access to the Internet directly from a phone equipped with a built-in LCD screen.

Like the i-mode service, which has more than 18.5 million subscribers, the proposed L-mode service will offer e-mail capability and a wide-ranging menu of compact HTML-based online content.

An NTT East official said that already more than 300 companies have expressed interest in providing L-mode service content.

The two NTT firms submitted their applications for L-mode service licenses Thursday afternoon to the Ministry of Public Management, Home Affairs, Posts and Telecommunications — the new consolidated ministry that includes the former Ministry of Posts and Telecommunications (MPT).

If the licenses are granted soon enough, the firms hope to launch L-mode services as early as April.

Quick approval is not assured, however.

The MPT had previously given its unofficial OK for the NTT firms’ L-mode plans on the condition that they use long-distance lines of other carriers to connect subscribers to their L-mode Internet gateways in Tokyo and Osaka.

The new ministry abruptly changed its mind at the end of January, however, citing concern that the L-mode service as then-proposed would still violate the “NTT Law,” which limits NTT East and NTT West to intra-prefectural phone business.

The revised plan contained in the applications submitted on Thursday attempts to address the ministry’s concerns by specifying only an intra-prefectural line charge for the service payable to NTT, and leaving it up to participating long-distance carriers and content providers to set their own fees.

Some industry observers predict, however, that the ministry may force the two firms to revise their business plans yet again, or even postpone service launch until the NTT Law can be amended (a move expected in late 2001).

Furthermore, L-mode still faces strong opposition from rival telecommunications firms, who charge that it would strengthen NTT’s existing market dominance, as well as from Internet service providers (ISPs), who fear that L-mode’s direct Net-access model could impact their own business.

Under the plan as submitted, L-mode subscribers would pay a monthly fee of 240 yen (US$2.05) to NTT plus separate fees to the participating long-distance phone companies and content providers.

Normal telephone charges would also apply.

The plan also calls for new NTT public pay phones to be equipped for L-mode access.

NTT East and NTT hope that L-mode will help stem the ongoing decline in fixed-line phone subscriptions and pay phone use attributable to the growing popularity of mobile phones.

Together, the two firms will invest more than 5 billion yen (US$43 million) in their new L-mode service, and reportedly are targeting a nationwide subscriber base of at least 1.5 million within one year.

News Around the Web