Conjoint analysis of demand for IP telephony: The case of Japan

With the recent diffusion of broadband services, IP telephony is expected to spread significantly in Japan. This paper investigates the demand for IP telephony by using conjoint analysis. Projecting IP telephony demand also contributes to Japanese info-communication policy discussions. Two points are made. First, IP telephony is still currently considered an optional supplement or an add-on service option of high-speed, broadband Internet access services in Japan rather than a close substitute of existing plain old telephone service (POTS). At this point, we find little evidence that many households will promptly forsake their fixed line service for IP telephony. Second, we conclude that the key condition for the proliferation of IP telephony is the complete guarantee of quality of service (QoS), including voice quality, number portability, fax usage, and emergency access, comparable to or exceeding that of existing POTS. Running title: IP telephony in Japan JEL classifications: L52; L86; L96