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Technology Stocks : INTERPHASE(INPH): Good future for this stock -- Ignore unavailable to you. Want to Upgrade?

To: peter a. pedroli who wrote (730)	1/2/2001 10:23:55 AM
From: peter a. pedroli	Read Replies (1) \| Respond to of 825

2001 Is Year Of Rising Broadband Access For Japan (12/20/00, 11:33 a.m. ET) By Eriko Amaha, Reuters TOKYO -- With a slew of companies rushing to wire Japan for high-speed Internet access, analysts say 2001 will be the year of broadband for Japan as it finally moves to catch up with peers such as South Korea and the United States. The race will intensify this month when telecom giant Nippon Telegraph and Telephone Corp.'s local service providers, subsidiaries NTT West and NTT East, begin offering broadband fiber-to-the-home (FTTH) and DSL services. With revenue from voice traffic shrinking and deregulation opening its existing networks to competitors, the NTT group is particularly pinning its hopes on FTTH services as a key driver of growth. "Anyone who can get fiber to homes and offices will be competitive," NTT president Junichiro Miyazu told the Mainichi newspaper. "I want optical fiber to be our ace product." But analysts said there may not be enough demand for high-speed services to pay for the costly migration from copper to fiber, especially in a country where even ISDN, much slower than either FTTH or DSL, is still in its infancy with only 10 million users. Shinya Sano, an analyst at Mitsubishi Research Institute, said a dearth of "killer contents" such as interactive games or video streaming would also discourage consumers from subscribing to high-speed Internet services. As of March, 220,000 kilometers of optical fiber was in place nationwide, compared with 1.027 million kilometers of copper lines, according to NTT, which owns 36 percent of the total optical fiber network. "Everyone has equal footing in the broadband market," said Toshiaki Iba, a telecom analyst at Tokyo-Mitsubishi Securities. It's unclear who would succeed, Iba added. Before the market for faster and more expensive optical-fiber networks takes off, however, analysts said the first test will come for DSL services, which provide the easiest and cheapest way of promoting broadband access since they use existing copper lines. They can deliver data at speeds up to 1.5 Mbit/s, or more than 20 times faster than dial-up modems. Nomura Research Institute predicts the DSL market will grow, to $570 million in annual revenue by 2005 from the current $4.4 million. The DSL market is already looking crowded, with entrants ranging from small startups like Tokyo Metallic Communications and eAccess to big-name telecom companies, most of them concentrating on urban areas. DDi Corp. (stock: DDIC), Japan's second-largest telecom group and widely known as KDDI, joined the fray last week with an announcement it will begin DSL services in the spring of next year and will offer fiber-optic services in the near future. The stiff competition is also eroding pricing and NTT is struggling to match its competitors. Venture firm Tokyo Metallic charges $240.20 for initial installation and a monthly fee of $55.97 for unlimited access at 640 Kbit/s receiving and 250 Kbit/s sending. Last week, NTT lowered its DSL charges to about $71.83 a month with an initial installation fee of $168.82. FTTH services, the focus of NTT's broadband hopes, come with a much higher price tag: $115.51 per month plus a $239.93 initial installation charge for capacity of up to 10 Mbit/s. NTT plans to spend $1.7 billion to build optical-fiber networks in the business year to next March, and the cost is likely grow as it aims to boost its fiber coverage in metropolitan areas. "The risk scenario for NTT is to be stuck with high capital spending while demand remains sluggish," said Tokyo-Mitsubishi Securities' Iba. Eric Gan, chief operating officer of DSL venture eAccess, also sees risks in NTT's strategy of offering full-line services. Gan said a focused strategy will be key to surviving in the fast-moving broadband market, where infrastructure costs are steep. "Big companies are operating like a supermarket or deparment store," he said. They offer everything from ISDN to DSL to fiber-optics. More challenges lie ahead for NTT with a government panel proposing to open up its fiber-optic networks to competitors