Business

NTT Docomo to scrap early termination fees for some users

JIJI

Mobile phone carrier NTT Docomo Inc. said Tuesday that it will eliminate penalty fees for early termination of two-year contracts for certain users.

Subscribers who pay their mobile phone fees with the carrier’s “d card” credit card will be eligible for the free termination, while other users will be charged ¥1,000 for early contract cancellations. Two-year binding contracts will be scrapped for subscribers using the card, but will remain for other customers.

The new plan will apply to contracts from October.

The move comes ahead of the Oct. 1 enactment of the revised telecommunications business law limiting the amount of early termination penalty charges to ¥1,000. Until now, NTT Docomo and two other major carriers — SoftBank Corp. and KDDI Corp. — have charged users a uniform ¥9,500 if they terminated their two-year contracts early.

The communications ministry determined that the high penalties discouraged subscribers from switching carriers, contributing to high mobile communications fees.

SoftBank and KDDI have already announced changes to their early termination policies, with the former set to lower the fee to ¥1,000 and the latter planning to scrap the fees for all subscribers and eliminate two-year binding contracts.

Rakuten Mobile Inc., which is planning to fully launch its services next year, will not introduce two-year binding contracts and doesn’t plan to have cancellation fees.

NTT Docomo made its decision out of the belief that the reward points system and other benefits for “d card” users are enough to convince people to continue using the carrier. The card has roughly 12 million users.