NEW YORK -(Dow Jones)- Japan's communications ministry is considering loosening rules requiring the two local phone carrier units of Nippon Telegraph and Telephone to install pay phones, in an effort to reduce deficits in their pay-phone businesses, informed sources said Saturday, according to Kyodo News.
If the rules are loosened, the disappearance of pay phones has a chance of speeding up, possibly causing difficulties for those who don't own cellphones or hampering efforts to make calls in times of disasters, Kyodo reports.
Currently, one pay phone must be installed every roughly 500-meter-square area in densely populated districts under the enforcement rules of the Telecommunications Business Law. In other districts, one pay phone is needed every roughly 1-kilometer-square area, according to Kyodo.
As a result, the two companies have 109,000 pay phones under the obligation and the number hasn't changed in the past decade, Kyodo reports.
Meanwhile, the number of pay phones installed in the country outside the framework of the obligation dropped from about 800,000 in 1995 to some 400,000 10 years later, Kyodo reports.
The new plan now being mulled by the Internal Affairs and Communications Ministry would apply the 1-km-square rule to the densely populated area. The ministry plans to finalize its stance by March 2009, the sources said, according to Kyodo.
The ministry's move comes amid the backdrop of mounting deficits in the pay-phone businesses run by Nippon Telegraph and Telephone East Corp., which handles the eastern half of Japan, and Nippon Telegraph and Telephone West Corp., which handles the country's western half, Kyodo reports.
The number of calls initiated by pay phones in 2005 was 590 million, down 92% from 7.14 billion calls in 1995, due largely to growing cellphone use, according to Kyodo.
NTT East posted an operating loss of Y2.8 billion in the pay-phone business in fiscal 2004, while NTT West saw a deficit of Y2.1 billion in the same year, Kyodo reports.
Some industry officials have called for looser rules on pay-phone installation as NTT's pay-phone business falls under the universal service fund, under which telecom operators are required to subsidize losses in unprofitable areas as an industry, Kyodo reports.
(END) Dow Jones Newswires "
Posted to the site on 26th August 2006
Posted to: www.cellular-news.com/story/19015.php