The Technical Reason for Distance-Based Pricing
Landline call rates in Japan once varied dramatically by distance. A local call cost 10 yen for 3 minutes, while a Tokyo-to-Osaka call cost 400 yen for the same duration. This price gap may seem unreasonable, but it was a rational pricing structure rooted in the technical constraints of the analog telephone network.
In the analog telephone network (PSTN), calls were transmitted over physical copper wires (metallic lines). For a local call, both the caller and the recipient were connected to the same telephone exchange, so the call was completed by switching circuits within that single exchange. Long-distance calls, however, had to pass through multiple relay exchanges. A call from Tokyo to Osaka would travel through the Tokyo local exchange, the Tokyo toll exchange, several relay exchanges, the Osaka toll exchange, and finally the Osaka local exchange.
Each relay exchange incurred maintenance, power, and staffing costs. Trunk lines (relay circuits) also had limited simultaneous call capacity, requiring massive cable installations on high-demand routes. The farther the distance, the more exchanges were involved and the longer the trunk lines used, causing costs to accumulate. Understanding how phone numbers work makes this structure even clearer.
The 10-Yen Local Call
Japan's local landline call rate was long set at "10 yen for 3 minutes." This rate was established in a 1972 pricing revision by the Nippon Telegraph and Telephone Public Corporation (now NTT) and remained unchanged for decades. Local calls were cheap because they did not pass through relay exchanges, keeping infrastructure costs low. Additionally, the public corporation maintained a policy of providing affordable local calls as a basic communication service under the principle of "universal service."
The "3 minutes for 10 yen" unit was also tied to the public phone pricing system. Inserting a 10-yen coin into a public phone gave you 3 minutes of local talk time - a simple, intuitive system deeply embedded in Japanese telephone culture. Note that the "3 minutes" was the minimum billing unit: a call lasting 3 minutes and 1 second was charged 20 yen.
The High Cost of Long-Distance Calls
Distance Tiers and Rate Tables
Under NTT's distance-based pricing, multiple rate tiers were set according to the distance between caller and recipient. Using the 1990s rate structure as an example: local calls (within the same area code) were 10 yen/3 min, adjacent areas (up to 20 km) were 20-30 yen/3 min, up to 60 km was 40-60 yen/3 min, up to 100 km was 80-100 yen/3 min, over 100 km was 120-180 yen/3 min, and the longest distances (e.g., Tokyo to Okinawa) were 360-400 yen/3 min.
In other words, the cheapest local call and the most expensive long-distance call differed by a factor of 40 for the same 3 minutes. This price gap contributed to the perception of long-distance calls as a "luxury" and instilled in Japanese people the awareness that "long phone calls cost money."
Tips for Saving on Long-Distance Calls
Various strategies emerged to reduce the high cost of long-distance calls. People would call during the late-night/early-morning discount window (11 PM to 8 AM, up to 40% off), prepare notes beforehand to keep calls short, and use letters or postcards for non-urgent matters instead of calling.
In the late 1990s, carriers other than NTT (Japan Telecom, DDI - a predecessor of KDDI, etc.) entered the long-distance market. The "My Line" system allowed users to choose their carrier, and competition gradually drove long-distance rates down.
History of NTT's Rate Revisions
NTT's call rates (and those of its predecessor, the public corporation) were revised in stages as technology advanced and competition intensified. Here are the key milestones:
- 1953: Local call rate of 7 yen per call (unlimited duration) introduced
- 1972: Local calls shift to time-based billing at "7 yen for 3 minutes." Long-distance rate tiers formalized
- 1976: Local calls revised to "10 yen for 3 minutes." This rate persists for a long period
- 1985: Public corporation privatized as NTT. Telecom liberalization opens the market to new entrants
- 1993: Major reduction in long-distance rates. Tokyo-Osaka drops to 180 yen/3 min
- 1999: NTT restructured into NTT East, NTT West, and NTT Communications
- 2001: My Line system launches, letting users choose their carrier
- 2004: Hikari Denwa service launches with a flat nationwide rate of 8 yen/3 min
- 2024: PSTN-to-IP migration completed. Landline call rates unified nationwide
Over roughly 70 years, call pricing shifted from "distance-proportional metered billing" to "flat-rate regardless of distance." The biggest driver of this change was IP migration, discussed next.
IP Migration Eliminates Distance-Based Pricing
In January 2024, NTT completed the IP migration (metal-to-IP conversion) of its fixed-line network. This replaced the legacy analog exchange-based call routing with IP (Internet Protocol)-based transmission. In an IP network, voice data is packetized and transmitted using the same principles as the internet, virtually eliminating the cost differential caused by physical distance.
After IP migration, NTT's landline call rate was unified at 9.35 yen/3 min (tax included) nationwide. A Tokyo-to-Okinawa call that once cost 400 yen/3 min is now nearly the same price as a local call. As explained in our VoIP basics guide, IP technology has fundamentally restructured the economics of telecommunications.
Hikari Denwa pioneered this shift when it launched in 2004 with a flat nationwide rate of 8 yen/3 min (8.8 yen tax included) from the start. As Hikari Denwa adoption grew, users increasingly switched from distance-based analog lines, steadily eroding NTT's analog subscriber base. See also our guide to evaluating landline cancellation.
Memories of Tehodai
No discussion of the distance-based pricing era is complete without mentioning "Tehodai" (Tele-Hodai), launched by NTT in 1995. Tehodai was a flat-rate service that made calls to one or two designated phone numbers unlimited during late-night/early-morning hours (11 PM to 8 AM). At 1,800 yen/month (for local calls), this service exploded in popularity during the dawn of the internet in Japan.
At the time, internet access was primarily via dial-up, requiring a phone call to the provider's access point. Without Tehodai, every minute online incurred call charges, making extended use financially impractical. The rush of users connecting at exactly 11 PM - the start of Tehodai hours - became known as "Teho-Time," an iconic phenomenon of late-1990s internet culture.
Tehodai was discontinued in January 2023. The spread of ADSL and broadband had made dial-up access obsolete. Yet Tehodai's contribution to Japan's internet adoption was immense, and it deserves credit for popularizing the concept of "flat-rate communication" among consumers. Stylish landline phones may also evoke nostalgia for the telephone culture of that era.
Current Landline Rates and Future Outlook
With IP migration complete, landline call rates are now virtually distance-independent. NTT East/West subscriber lines charge a flat 9.35 yen/3 min nationwide, and Hikari Denwa charges 8.8 yen/3 min nationwide. Calls to mobile phones cost 17.6 yen/min (on Hikari Denwa), also flat regardless of distance.
Looking ahead, landline subscriptions continue to decline. NTT's subscriber line count stood at about 14 million in 2024, down from a peak of about 63 million in 1997 - less than a quarter. The spread of mobile phones and internet calling (LINE calls, Zoom, etc.) is steadily shrinking the landline's role.
Even so, as symbolized by why phone numbers start with zero, landline technology and culture remain a vital foundation of Japan's telecommunications infrastructure. Knowing the history of distance-based pricing is also an opportunity to appreciate how fortunate today's communication environment truly is.