It is important to encourage competition in the mobile phone carrier industry and link this to fee reductions.
NTT Docomo Inc. and KDDI Corp., which operates the "au" mobile phone service, have separately announced new rate plans to reduce monthly communications fees by up to 40 percent. They will introduce the plans in June or later.
Moves to review communications fees are welcome. The new plans charge fees advantageous to those who use the same smartphones for a long time.
However, users will not enjoy higher discounts unless they meet various conditions, such as signing a subscription as a family and entering into contracts combined with the use of fiber-optic network services. In some cases, the new plans could charge higher fees. Users need to be careful.
Mobile phone carriers and sales agents must strive to provide thorough explanations to customers.
With more requirements, fee systems become more complicated to understand. Rakuten Mobile Inc. will join the industry this autumn as a new mobile phone carrier, intensifying the competition. There is probably room to consider whether it is possible to further simplify fee systems and reduce costs.
The new plans are based on the separation of handset prices and communications fees.
The government has criticized current fee-charging plans, which combine handset prices and communications fees to lower the purchase cost of mobile phones, saying that the current plans keep communications fees high. The revised Telecommunications Business Law, which prohibits such fee plans, was enacted in the current Diet session. The new plans are considered to be a move to prepare for the enforcement of the law.
The problem is handset prices.
Under the new fee-charging plans, there will be no financial resources to allow discounts on handsets, the cost of which is currently tacked on to communication fees, making it more likely that handset prices will increase. As a result, the burden on users who buy high-priced smartphones will further increase. It is hoped there will be a wider variety of reasonably priced handsets available.
Change the oligopoly
NTT Docomo will start a system in which it will accept old handsets as trade-ins to reduce the actual costs users have to bear. If such a system becomes widespread, it will vitalize the market for secondhand mobile phones.
Each mobile phone carrier needs to think hard to devise ways for users to actually feel a lesser burden in terms of the total cost, including communications fees.
Another task is to expand the use of budget smartphones.
The Internal Affairs and Communications Ministry is considering reducing interconnection fees, which budget smartphone service operators pay to major mobile phone carriers when they use the majors' communication lines. The ministry should aim to realize this at an early date.
There are many companies whose budget smartphone businesses are in the red. If interconnection fees are reduced, the profitability of the low-cost smartphone business will increase, creating strength among operators to offer services with further reduced prices. It is hoped this will provide an opportunity to change the oligopoly among the major carriers.
The number of subscriptions has exceeded 170 million, and mobile phone-related spending has become a weight on household budgets. If mobile phone-related fees are reduced, each household can spend more on other goods. This could serve as a tailwind to boost consumer spending, which accounts for the greater part of Japan's gross domestic product.
It is necessary for the government to make persistent efforts to steadily realize this scenario.
(From The Yomiuri Shimbun, May 19, 2019)
Read more from The Japan News at https://japannews.yomiuri.co.jp/
