December 13, 2000

Application to MPT for Revision of Interconnection Charges

NTT West and NTT East today applied to the Minister of Posts and Telecommunications for the authorization to revise their Articles of Agreements Concerning Interconnection to Designated Telecommunications Facilities including interconnection charges based on the long-run incremental cost (LRIC) methodology for FY 2000, FY 2001, and FY 2002; and leased circuit interconnection charges for FY 2000 that were derived on the basis of FY 1999 interconnection accounting.

(1) Of the interconnection charges stipulated in the Articles of Agreements, the FY 2000, 2001, and 2002 charges for end-office (group center: GC) and tandem-level (zone center: ZC) interconnections were calculated on the basis of the LRIC methodology, which was introduced from FY 2000.
(2) Interconnection charges for leased circuits, directory assistance services, and calls from public phones were recalculated on the basis of FY 1999 interconnection accounting.
(3) Flat-rate charges for ISM (I interface subscriber module)-based interconnection services, and rate discounts for carriers for intra-prefecture leased-circuit services were newly introduced.

Attachments 1, 2, and 3 provide detailed listings of the new interconnection charges by function.

2.The impact of revised rates on NTT revenue
As detailed in the table below, the new interconnection rates will reduce regional NTT carrier revenue by 191.0 billion yen in FY 2000 (NTT West, down 86.0 billion ; NTT East, down 105.0 billion yen).

- Impact of new interconnection charges on FY 2000 revenue
(Unit: 100 million yen)
Impact of new interconnection charges on FY 2000 revenue

3.Timing of revision
Once approval from the Minister of Posts and Telecommunications has been received, we will move swiftly to implement the proposed revisions to our Articles of Agreements and enter into agreements with other telecom carriers.
Interconnection charges approved as a result of the latest filing shall be applied retroactively, back to April 1, 2000 (excluding charges for the ISM flat-rate function and the transmission function for the ISM flat-rate function, and the rate discounts for carriers).

-(Attachment 1) 1. Proposed LRIC-based interconnection charges
-(Attachment 2) 2. Proposed interconnection charges based on FY 1999 interconnection accounting
-(Attachment 3) 3. Proposed flat-rate charges for ISM-based interconnection services
4. Proposed discount rates for carriers of intra-prefecture leased-line services
-(Reference 1) Reduction in NTT interconnection charges
-(Reference 2) Example of assessed telephone and ISDN interconnection charges
-(Reference 3) Comparison between User Charges and the level of interconnection charges