The communications ministry said it will ask Japan's three top mobile communications carriers to stop charging customers for switching companies when their contracts expire.
The aim is to encourage competition in an already saturated market, the ministry said.
Mobile phone contracts typically last for two years. If one wants to change carriers, NTT Docomo Inc., KDDI Corp. and SoftBank Corp. require customers to pay a penalty by canceling the contract before it matures, or pay charges for an extra one- or two-month period to end the contract, which is automatically renewed unless such procedures are taken.
An advisory panel to the Internal Affairs and Communications Ministry approved on Friday a report that concluded customers should be allowed to simply terminate their contracts on time without being penalized.
The companies "may be asking users to pay money that they were not expecting to pay," the report noted.