Business

Rakuten begins low-cost mobile phone service in Japan

Kyodo

Rakuten Inc.’s mobile phone unit on Wednesday launched its full-scale mobile phone service with drastically reduced charges in Japan, fueling speculation that the new operator would intensify the price battle with its bigger rivals.

Rakuten Mobile Inc. introduced the single fee plan that charges ¥2,980 ($27) per month for unlimited calls along with data services in some urban areas including Tokyo, Nagoya and Osaka where it has established its own networks.

In a bid to grab customers away from larger rivals, the company’s mobile fees have been reduced to less than half the charges that three major wireless carriers — NTT Docomo Inc., KDDI Corp. and SoftBank Corp. — currently offer for similar large data plans at around ¥7,000 per month.

Despite its efforts to substantially lower mobile fees, however, the fourth major mobile phone operator rents KDDI’s nationwide network for its services in a large part of Japan and limits free data usage up to 2 gigabytes per month.

Subscribers need to pay an additional ¥500 for 1 gigabyte usage if they use over 2 gigabytes per month where Rakuten’s own network is not available.

Rakuten Mobile plans to expand its own wireless network through the country’s 47 prefectures by March next year.

To boost the number of subscribers, the e-commerce giant’s mobile phone unit offers voice and data services free of charge to 3 million customers in the first contract year, accepting applicants through its website.

Rakuten Mobile first entered the wireless business in October 2014 as a virtual mobile network operator, using other mobile phone operators’ networks.

The company had initially planned to launch full-scale services with its own network in October last year, but postponed due to delays in installing network base stations.

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