Business / Corporate

Line makes splash by launching cut-rate smartphone service

by Kazuaki Nagata

Staff Writer

Internet giant Line Corp. on Monday made its foray into mobile phone services, launching low-cost smartphone and SIM card packages that offer subscribers free use of its messaging app.

Branded Line Mobile, the service, excluding the cost of handsets, will cost between ¥500 and ¥3,220 a month, depending on data usage, the new company said.

And in a win for Line users, the firm said Line Mobile subscribers will have unlimited data usage for some Line services, including the sending of text messages, photos and videos, as well as Line voice calls. It also said plans are afoot to exclude data used for Facebook and Twitter as well.

While Line provides a number of popular smartphone games, it said the use of data related to games will be counted.

Jun Masuda, chief strategy and marketing officer at Line, said he hoped the new business will increase the number of smartphone users in Japan, adding that about half of Japan’s cellphone subscribers are still not using smartphones.

Increased smartphone use will also ramp up demand for other services such as messaging stickers and games, he said.

Subscribers to major mobile carriers pay at least ¥5,000 for 1 GB of data usage and “unlimited” voice calls that charge ¥20 per 30 seconds after five minutes. Line said it is charging ¥1,200 for 1 GB of data usage and ¥20 per 30 seconds of talk time.

Line Mobile, wholly owned by Line Corp., began advance sales of 20,000 SIM cards on Monday, with full-scale service to launch on Oct. 1. It will also market eight models of SIM-free Android smartphones and tablets.

Line said customers can initially subscribe to the service online, but that it plans to introduce in-store sales, including at electronics stores.

Line is renting NTT Docomo Inc.’s network. It is one of about 200 mobile virtual network operators, or MVNOs, registered in Japan providing cheaper monthly smartphone services than the major carriers, such as Docomo and SoftBank Corp.

According to Tokyo-based MM Research Institute, MVNO subscribers totaled 5.39 million at the end of March, up 65.5 percent from a year before. The figure is expected to more than double to 11.7 million by the end of March 2018.

Just how much of that will be due to Line Mobile, however, remains to be seen.

“The impact of Line Mobile entering the market is quite high,” said Ayano Kado, chief of the new unit. “Many people are not familiar with the term MVNO, but they know Line. We hope to contribute to improving the recognition” of budget smartphone services.

Competition has already become fierce with numerous firms entering the market, from IT firms such as Rakuten Inc. and NTT Communications Corp. to players from other industries, such as retail conglomerate Aeon Co. and Culture Convenience Club Co., the operator of DVD and CD rental store Tsutaya.

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