NTT Docomo Inc. said it will cut its mobile phone charges by 20 to 40 percent from the April-June quarter next year amid the government’s call on cell phone carriers to lower their fees.
NTT Docomo will offer lower charges with new plans under which handset payments and service charges will be separated. The move by the largest mobile carrier in Japan is expected to prompt its two major rivals KDDI Corp. and SoftBank Corp. to follow suit.
The top three mobile carriers currently offer similar packaged plans combining the handset and service fees.
“The (existing) plans are complicated and difficult to understand. We want to review our plans boldly to make them simple and easy to understand,” NTT Docomo President Kazuhiro Yoshizawa said at a news conference.
The decision comes after Chief Cabinet Secretary Yoshihide Suga said in August that mobile phone charges in the nation should be reduced by 40 percent.
The Ministry of Internal Affairs and Communications recently set up a panel to discuss mobile phone charges.
“This is our own decision,” Yoshizawa said when asked whether the government’s call had any impact on its decision. The cuts in service charges will reduce consumers’ payments by up to ¥400 billion ($3.5 billion) a year, he noted.
While Japan’s mobile phone market has long been dominated by the top three carriers, there are continuing consumer complaints that mobile phone fees have been too high in comparison with other countries.
In April, the government granted approval to e-commerce giant Rakuten Inc. to enter the business from October 2019, in a move that is expected to spur greater competition.
Households of two or more people spent on average around ¥122,500 in mobile phone fees in 2017, according to the latest survey by the ministry.