Japanese Cell Phone Carriers must Provide Fee Structure Acceptable to All Users

Editorial

13:33 JST, December 6, 2020

It is important to simultaneously strive toward reducing cell phone service charges and making it easier to understand the plans so that many users can accept them.

NTT Docomo Inc. has announced it will introduce a new plan with the lowest cost among the major carriers, starting next March. For a plan involving monthly data usage of up to 20 gigabytes, the company decided to charge 2,980 yen per month excluding tax.

It also intends to announce by the end of this month reviews of its current mainstay plans, including the large-capacity Gigaho plan.

The 20 GB data capacity allows users to watch high-quality video for one hour a day. But currently users can only choose a 30 GB plan to watch high-quality video for a long time, for a fee of more than 7,000 yen a month. With the introduction of the 20 GB plan, Docomo could get close to the levels in London, where competition has lowered cell phone fees.

Prime Minister Yoshihide Suga has viewed the current situation as problematic, saying cell phone fees remain high due to the oligopoly of the three major companies: Docomo, KDDI Corp., which operates the “au” mobile phone service, and SoftBank Corp. It is significant that the nation’s largest mobile carrier has decided to drastically cut its charges.

The company plans not to accept applications for the new plan at Docomo Shop and other outlets, but to only process them online to reduce costs. Docomo aims to attract young people by allowing them to use the high-speed, large-capacity 5G telecommunications standard with no additional charge.

However, it will be difficult to determine whether the new plan is economical because family members will not be able to receive family discounts after switching to the new plan from others. The new plan will also not support the conventional cell phone email service.

Docomo plans to charge customers based on how much data they use in mainstay plans. The company should give consideration to elderly people who are unfamiliar with the internet and people who only use a small amount of data.

KDDI and SoftBank announced 20 GB plans under their budget brands at below 5,000, yen but Internal Affairs and Communications Minister Ryota Takeda criticized the plans because they are not under those companies’ main brands and high fees are required switch to new plans.

The two companies must quickly work out countermeasures against Docomo.

It has been pointed out that mobile phone companies have burdened users with complicated fee systems that combine various discounts and handling fees. A clear, customer-oriented system should be redesigned when cutting charges.

If the major carriers cut their rates, it could put pressure on the financial situation of Rakuten Inc., which fully entered the market in April, and on low-cost cell phone communications companies who lease networks from major companies.

If newcomers, who play a role in revitalizing the market, are forced to struggle, this would be mixing up priorities. The government should create a healthy competitive environment, such as encouraging major companies to lower their network lease charges.