Government leans on mobile carriers to simplify pricing

Bloomberg

The government has said the pricing schemes used in mobile phone services lack transparency and fairness, with bills taking up a rising share of household budgets.

Customers need more control over components of the plans, Chief Cabinet Secretary Yoshihide Suga told reporters Monday.

His comments echoed those from a meeting the same day of a task force set up by Prime Minister Shinzo Abe to look at ways of lowering the cost of wireless services.

Mobile phone bills have become too high and are putting a burden on family budgets, Abe said at an economic conference last month. Internal Affairs and Communications Minister Sanae Takaichi said the government will come up with a plan to reduce rates by the end of the year.

“There is a sense among the people that pricing plans do not take into consideration the needs of various users, especially the light users,” Suga said. “The users only get to choose from pre-set pricing plans and the offerings among the top three carriers are the same.”

Last month, Takaichi said there need to be more price plans that do not require all-you-can use data and voice, according to a transcript of a Sept. 29 news briefing on the ministry’s website.

She also called on carriers to compete more on pricing, instead of using device discounts to attract customers.

Takaichi said the task force will also look into making it easier for mobile virtual network operators to enter competition.

The ministry’s own research showed smartphone users in Tokyo had higher phone bills than their counterparts in Paris, Stockholm and Seoul, according to a report released in July.

In one case study, the monthly difference was as much as $32.

Shares of NTT Docomo Inc., the nation’s largest mobile-phone carrier by subscriptions, KDDI Corp. and SoftBank Group Corp. fell after Abe said in September that mobile phone rates were too high.

Rate cuts may lower revenue at SoftBank and KDDI by about ¥10 billion this fiscal year and as much as ¥45 billion at Docomo, according to estimates by Nomura Holdings Inc.