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NTT Docomo Inc. plans to follow the other major carriers in reducing some of its cell phone charges. KDDI Corp. and SoftBank Corp. have already announced price cuts in their respective budget brands, but Docomo is the first of the three major companies to start reviewing prices in its main brand, covering many users.
In addition to targeting large-capacity plans of its main brand, Docomo is also introducing a new budget brand and reviewing its fee structure in general.
The focus will now be on the measures that KDDI, SoftBank and new market entrant Rakuten Inc. will come up with as a price war appears to be starting.
Docomo will announce its price reduction policy by the end of this week. It will continue to consider the specific range of the price reduction and the structure of the system in the future.
Its current price plans are largely divided into a plan with a 7 gigabyte limit for people with relatively low data usage and a high-capacity plan of 30 GB that costs 7,150 yen per month on the 4G network. Thus, people who use 10-20 GB will also have to sign up for the more expensive high-capacity plan.
In its review, Docomo is expected to assess charges based on the amount of data used, leading to a substantial price reduction.
Internal Affairs and Communications Minister Ryota Takeda has been urging telecommunications carriers to reduce prices not only for budget brands but also for main brands.
“The burden of the novel coronavirus pandemic is weighing heavily on households,” Takeda said at a press conference on Nov. 1, repeating the call for lower prices. “I hope [the carriers] will work hard to reduce the burden on the people.”
Docomo is considering introducing a budget brand with a monthly plan costing around \3,000 for data volume of 20 GB. For the same capacity, the plan will be \1,000 to \1,500 lower than KDDI’s budget brand UQ mobile and SoftBank’s Y!mobile. Rakuten, which entered the market in April, offers only one plan: \2,980 per month with unlimited data usage.
With Docomo’s move, will the other major players take additional steps to reduce prices or come up with new price plans?
Rakuten Chairman and President Hiroshi Mikitani said in an interview with The Yomiuri Shimbun in November that there is still room for price reductions.
A spokesman for SoftBank said on Nov. 1, “We are considering a wide range of price cuts” including fee reductions for the core brand.
KDDI said, “The new plans for our budget brand have not yet been launched and we are working on them first.”
Using the 20 GB data limit as a base, Japan’s cell phone charges are the highest when compared to six major cities around the world including New York and London. The Suga Cabinet has thus made reviewing these high prices a pillar of its policy.
