Three of the nation’s top mobile phone carriers have reported to the communications ministry plans to remedy excessive handset discounts that have caused some users’ monthly rates to surge.
NTT Docomo Inc., KDDI Corp. and SoftBank Corp. will from this month reduce sales incentives that are used by handset retailers to run cash-back campaigns. They will also scale down discounts of monthly charges.
For customers who switch carriers under the mobile number portability system, the three companies have been offering cash back or monthly rate discounts to effectively sell handsets free of charge.
The carriers have been financing such campaigns with higher fees for relatively light users of data communications services, a practice the ministry has criticized as unfair. It requested the three firms come up with measures to address this by the end of last month.
Initially, the carriers are expected to reduce sales incentives and service fee discounts so that handset prices will rise by ¥10,000 to ¥20,000 each.
They are planning further measures after monitoring the impact on handset sales. The measures will be applied to the latest models of Apple Inc.’s iPhone and other popular handset brands.
“We’ll refrain from selling handsets effectively at zero yen from February,” NTT Docomo President Kaoru Kato said on Friday.
As the cash back refunds are determined by handset distributors, NTT Docomo will review discounts on service charges, which it decides.
The communications ministry will have the three carriers report the total amounts of discounts offered and start unannounced inspections of mobile phone shops this month to prevent them from offering such rebates on their own.
It will also instruct the carriers and shops to implement the measures if needed.
The changes are likely to make renewing handsets difficult for customers — especially younger ones — who frequently change carriers to obtain the latest smartphones.