April 1, 2002

Fusion Starts IP Subscriber Telephone Services Tests

Fusion Communications Corporation will launch IP subscriber telephone services (*1) in just its second year of business. Commercial services are scheduled to begin some time during the summer of this year. In preparation for the start of services, Fusion has decided to conduct general IP subscriber telephone service tests. On April 1, the company invited a number of IP telephone terminal (*2) developers and manufacturers to participate in the tests.

Fusion is marking the one-year anniversary of its April 1, 2001 launch of next-generation IP telephone services (IP toll bypass telephone services) (*3) using an IP toll bypass network. During its first year of operations, Fusion provided long-distance and international IP toll bypass telephone services.

Fusion overturned common practice concerning telephone charges with the launch of its long-distance service for a flat rate of 20 yen per three minutes, 24 hours a day nationwide, regardless of the time or distance. Fusion sought to sign up customers to reach 1 million subscriber lines during the first year (through March of 2002), but was able to greatly surpass that goal with more than 1.2 million subscriber lines. It also appears that sales revenues during fiscal 2001 will exceed 10 billion yen.

Fusion has already received expressions of interest from several manufacturers concerning the development of IP telephone terminals compatible with the company's network. Fusion will provide the connectivity technology information planned for use with its IP subscriber telephone services to all manufacturers that participate in the tests and will conduct tests using the company's actual network.

Fusion has adopted SIP (*4), which is expected to become a leading next-generation IP communications protocol, as its basic network connection protocol. Fusion will introduce SIP-compatible soft switches on its IP network ahead of other telecommunications service providers, and plans to offer, in addition to voice communications, a wide variety of next-generation IP communications services made possible by SIP.

A number of communications device manufacturers and "soft phone" developers and manufacturers are moving forward with commercialization of SIP-compatible IP telephone terminals. By providing the actual environment for connection to Fusion's network in the recent tests, manufacturers are able to conduct effective tests of their own terminals. Also, by providing support for the commercialization of terminals by manufacturers, Fusion is helping to create an environment in which multiple manufacturers develop IP telephone terminals, thereby promoting the widespread use of IP telephone terminals with advanced functions at lower prices.

The IP subscriber telephone services offered today are generally provided as subsidiary services to ADSL or ISP services, but Fusion's carrier-class IP subscriber services, which are based on technologies that the company has proven with its IP relay services, can be used not only with specified ISPs or ADSL providers, but with any permanent connection to the Internet. With the development of IP telephone terminals by a number of manufacturers, Fusion hopes to stimulate the IP telephone terminal market as well as IP subscriber telephone services.

*1 IP subscriber telephone services: IP telephone services that convert voice signals to IP for transmission from ADSL, CATV, and other permanent connections or broadband subscriber lines. Such services make possible advanced telephone services at lower cost without using an NTT East or NTT West access line.

*2 IP telephone terminal: A terminal device that converts a voice signal to IP and is necessary to use IP telephone services from a business or household permanent connection.

*3 IP toll bypass telephone services: IP telephone services that bypass the circuit switching networks for fixed-line telephone services by using IP networks to provide IP telephone services.

*4 SIP (Session Initiation Protocol): A protocol that controls IP communications adopted by the IETF, an Internet technology standardization body. SIP is compatible with a wide range of Internet applications and is suitable for services that combine voice and data.