Japan May Ask NTT to Cut Telecom Fees Earlier

TOKYO (07/03/2000) - Japan's telecom minister warned Friday that the country must be prepared to compromise with the U.S. government in the ongoing dispute over interconnection fees charged by Nippon Telegraph and Telephone.

The interconnection fees Japan's long-distance carriers and mobile-phone operators pay to use NTT's local phone lines have kept communications costs relatively high in Japan. The U.S. government and now the Japanese government have raised the concern that these high costs interfere with Japan's effort to revitalize its economy. Eita Yashiro, minister of posts and telecommunications, told a weekly news briefing that NTT may need to cut fees sooner than it had planned. "We cannot help but discuss how to expedite the timeline," he says. Yashiro is the first top Japanese official to suggest a timeline adjustment.

Although the Japanese government is a majority owner of NTT, it may have a difficult time convincing the telco to cut fees early. Even with an improved financial forecast, NTT West is expected to post a pretax loss of $282.5 million for fiscal year 2002, if it implements the cuts in three years. NTT refused to comment on the issue when contacted Friday afternoon in Tokyo before the company's regular press briefing for the Japanese media.

But Nihon Keizai Shimbun, Japan's financial daily, quoted an NTT official as saying, "We already have plans for staff cuts and other rationalization measures that are as drastic as we can make them." The official added, "So it is difficult to move up the pace [of the reduced interconnection fees] if it will move NTT West solidly into the red."

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