Japan phone services introduction
This is an English guide with information for people living in Japan to help you understand Japanese phone services and find cheap local and international phone rates.
Quick overview
Nippon Telegraph and Telephone (NTT) was privatized in 1985 but continued to dominate the phone market in Japan and keep rates high until just a few years ago. In 1999, NTT was split up into several entities (including NTT East and NTT West). Another big reform was the establishment of the "My Line" option, which gave consumers the right to choose from many independent carriers for their local, long distance and international phone services. But NTT continues to charge relatively higher rates, and the majority of Japanese choose NTT anyway (not an independent "My Line" provider) because they assume NTT stands for the highest quality. But even for those who try to opt out of NTT, it's nearly impossible. NTT owns most of the phone network in Japan and charges everyone (consumers and independent companies) various line and access fees. In the past, consumers actually had to "buy" their phone lines for more than US$1000, and there was (actually still is) a market for "used" phone lines (which can be transferred to another party). Be aware, though, that smart people don't "buy" phone lines anymore. It's cheaper to lease your line from NTT for about 500 yen per month. Besides, with more reforms likely in the future, people who "own" phone lines may end up with nothing but a slip of paper in the end.
Main companies and cervice options
Just about everybody has to work with NTT East or NTT West to set up basic phone service. When setting up your basic service, you can choose from various "My Line" providers who handle your calls. The alternative companies generally offer lower rates and identical service. They don't all charge low rates, so be careful not to fall for marketing (no matter how deliberately confusing). If you are living in the Kanto area and need a "My Line" provider, then I would recommend Tokyo Denwa (My Line Code: 0081)for your local and long distance (within Japan). For international long distance, though, it's best to go outside the "My Line" system if you really want to save money.
Getting cheaper international rates
I don't recommend NTT or even the "My Line" providers for international calling. Following are some cheaper options that you should consider.
Broadband Phone Services
Broadband phone services provide the cheapest international calling to and from Japan. If you will frequently call the USA, you may want to choose a US based broadband phone provider.
You can also choose from many broadband phone providers located in Japan, which you can use in combination with a US based broadband provider. I know at least one person who uses a Japanese broadband phone provider for calls within Japan, but he uses a US based broadband phone provider when he calls the USA. The reason is because is calling volume is so high that he saves overall this way. Also, if you use a US based provider, you can set up a local phone number (in your hometown for exampe) and people can use it to call you for free. Read my this article) and this comparison for options.
YahooBB may be the most popular broadband phone service in Japan. YahooBB users get very cheap rates to the USA and within Japan. YahooBB is an ADSL (high speed Internet) provider. You have to pay a one time fee (several thousand yen to NTT) to switch your line over and then monthly fees to YahooBB. It's a good deal if you plan to have high speed Internet anyway. YahooBB does not offer much customer support in English, and their customer support in Japanese isn't that great. Some English help is available here. There are other Japan based broadband phone providers, so you may want to compare current rates before choosing one.
I've heard that broadband phone service users now have the option to completely cancel their NTT local service, but then they can't receive incoming international calls or use Japan's emergency phone services. Keep in mind that if you sign up for a US based service then you'll get a local phone number in the USA that people can use to call you anytime. (Local phone numbers in countries outside the USA are available from this provider.)
Callback services
Callback services are another way to save on international calls. If you are calling Africa (and other expensive destinations) you may get better rates with a callback service than from a Japanese broadband phone service. If you don't have a high speed Internet connection, then callback may be the best way to call just about anywhere.
Read my article explaining how callback services work here.
United World Telcom (UWT) is the callback service that I recommend. UWT offers a 10 cents/min rate to the USA and some of the cheapest rates if you're calling Africa, Asia, the Middle East and other parts of the world (UWT Rates). UWT is a USA based company, so all communications are in English, and the service is billed monthly in US dollars to US or international credit cards.
Many people living in Japan only use a cell phone. Mobile phone services are expensive, but if you can go without a land line you may save overall. But international rates using cell phones are extremely high. This is another case for choosing a callback service. Use your cell phone to place international calls with relatively cheap rates via UWT. The rates are higher than calling over a land line, but if you are saving money by not having a land line then the benefit may outweigh the cost. The key will be controlling your cell phone usage.
Alternative Direct Dialing Services
T-1 Communications and G-Call work from a standard land line, and they are easy to use. They work just like a MyLine provider, except you need to dial a special 4-digit prefix before dialing a number. The rates to the USA may be a toss up, but if you are calling any another country there's a good chance that UWT has better rates.
Before you go
I hope this has been helpful. If you know people in other parts of the world who would like to call YOU, please send them to www.dial-abroad.org
Thanks.
For a detailed but older guide see my Japan Phone FAQ.