Last April, telecoms giant NTT announced the largest annual corporate loss in Japanese history — 2 trillion yen. More than a third of it came from its cell phone subsidiary, NTT Docomo.
Measures were deemed necessary to stem the red tide. So, on April 1, 2002, Docomo quietly announced it would seal off one source of loss — debt from foreign deadbeats.
All new foreign subscribers without Permanent Residency (eijuuken) must now pay a 30,000 yen refundable deposit to use Docomo services.
Several human rights organizations have condemned this step as discriminatory, asking why Japanese “deadbeats” aren’t being treated this way? Two groups, “United for a Multicultural Japan” and “The Community,” publicly called for a boycott, drafting a multilingual protest letter for Docomo customers.
The coordinators of these groups requested to meet Docomo President Tachikawa for an exchange of views, and on June 20 they visited Docomo’s swank Nagatacho penthouse headquarters overlooking the Imperial Palace, and had a conversation with several mid-level personnel.
According to a member of the Customer Relations Department, President Tachikawa was indisposed, so he offered to explain the company’s reasoning.
“According to our research,” he said, “foreign customers are delinquent on their bills at six times the rate of Japanese. They go home and leave us with a pile of debt. So our policy is not discrimination. It is a fact we have to counteract.”
Groups: “May we see your data and analyze your statistics?”
“Sorry, they cannot be made public.”
“Then we question your conclusions. Our sources in the financial analysis houses, who examine worldwide telecoms markets, say that around 99 percent of Docomo foreigners have ‘good credit ratings.’ They also confirm that the total Docomo debt incurred by deadbeat Japanese far exceeds that of foreigners. So why are you targeting foreigners?”
“Because foreigners are special. They can leave the country.”
“Our groups’ research indicates that Japanese stationed overseas also leave behind unpaid phone bills when they repatriate. Yet AT&T doesn’t slap a premium on all foreigners.”
“But we don’t slap all foreigners. Those with Permanent Residency are exempt from our deposit. They are treated just like Japanese.”
“Unfortunately, that still leaves over a million foreigners who are not. We also doubt Docomo understands how difficult Permanent Residency is to get. It takes at least five years, often longer if you are from a developing country.”
“But Docomo offers a special option to foreigners. If they don’t elect to pay the deposit, we provide a direct debit system after they divulge their account details.”
“Thanks, but with the recent computer mishaps at Mizuho Bank and some utilities companies overbilling their customers, this is a dubious privilege.”
“So,” said the company representative, “what would you have Docomo do?”
“Scrap the policy. Or require this deposit from all of your customers regardless of nationality.”
“We don’t see that as an option.”
“Understandably. There would be an exodus of Japanese to rivals like KDDI and J-Phone. But as things stand, Docomo telegraphs that, for one, foreigners are untrustworthy, and for another, their patronage is insufficient to worry about a boycott.”
“That is a clear misunderstanding. Of course we value our foreign customers. It’s just that they are six times more likely to default.”
“We assume Docomo has done a breakdown on Japanese defaulters by age group and occupation. Have you broken down foreign defaulters by visa status? Surely those on three-year visas are less likely to leave town.”
“We haven’t researched that.”
“So you’ve lumped the bad apples in with the good. Anyway, why does Docomo feel so special that it requires a deposit from foreigners? Your rivals don’t and they get by.”
“We are in bad financial condition. We need to cut our losses.”
“By targeting customers you assumed would not complain? How about offering a prepaid phone system to everyone? How about reporting individual deadbeat foreigners to overseas credit agencies?”
“NTT cannot do things like that easily.”
Shortly thereafter the meeting finished with a bureaucratic “kentou shimasu” — our input would be taken into consideration. Meanwhile, the deposit system remains in place.
There is a reasonably happy ending, though.
Docomo recently announced that from September it will accept credit card payments. Even foreigners with Visa and Mastercards issued overseas qualify.
Unfortunately, those with only a gaijin card to prove their creditworthiness (since many Japanese credit cards also refuse to issue to foreigners) must still cough up the 30,000 yen.