The communications ministry is arranging to eliminate in principle the 3,000 yen fee that mobile carriers charge customers who switch providers but want to retain the same phone number under the mobile number portability (MNP) system, according to sources.
Axing the charge is intended to spur competition, by making it easier for customers to switch to a new contract at a new mobile carrier, which in turn could lead to lower mobile phone charges.
Mobile phone charges in Japan are currently considered some of the world's most expensive.
The Internal Affairs and Communications Ministry also intends to change the system's guidelines this fiscal year.
The ministry's plan has three main elements. The fee for switching carriers under the MNP system would be abolished in principle, but companies would be allowed to charge up to 1,000 yen when this procedure is conducted in-store. The major carriers generally allow customers to apply online to use the MNP system between the hours of 9 a.m. and 8 p.m., but this service will become available 24 hours a day.
The plan also will prohibit excessive measures designed to deter customers from switching carriers. The ministry is leaning toward banning tactics such as enticing customers to use a different mobile phone plan at the same company, and awarding "points" that can be used to pay for mobile phone charges and shopping purchases.
The ministry decided to overhaul the MNP system because it considers the 3,000 yen fee to be preventing customers from easily switching between carriers. Such a fee is generally not charged in the United States, Britain and most other major nations. However, when the MNP system was introduced in Japan in 2006, a fee of 2,000 yen was set for changing operators. This was later increased to 3,000 yen.
Use of the MNP system has remained flat. The annual number peaked at 6.57 million cases in fiscal 2013, when NTT Docomo, Inc. launched sales of Apple Inc.'s iPhone, but hovered around 5 million cases from fiscal 2016 to fiscal 2018.
Before the MNP system was introduced, a customer who switched to a contract at a new carrier had to use a new mobile number. The system has allowed customers to conveniently use the same number long-term, but it has not resulted in the significant lowering of mobile phone charges that the government had hoped for.
--Impact likely to be limited
Three major carriers still hold the lion's share of the domestic market, and the government has run out of patience waiting for increased price competition. However, some observers believe lowering the hurdle to switching carriers alone will have only a limited impact, so more fundamental reforms may also be necessary.
This spring, the ministry established a working group tasked with reviewing the rules of competition in the market. This panel of experts held wide-ranging discussions on overhauling the MNP system.
The group regards as problematic the fact that NTT Docomo and two other major carriers were steadily raking in high profits compared with companies in other industries, yet there had been no change to the 3,000 yen fee for years. One estimate said the MNP fee brought the three carriers revenue of about 16 billion yen annually. "It's a stretch to say that's appropriate," one observer said.
Mobile phone charges in Japan remain stubbornly high. A communications ministry report issued in June showed the monthly fee of 8,175 yen for 20 gigabytes of data in Tokyo was the highest charged by carriers in six major cities around the world.
Chief Cabinet Secretary Yoshihide Suga, who has called for cheaper mobile phone charges, said, "There is room for prices to be cut significantly."
However, the head of a major mobile carrier pushed back at this suggestion.
"It's unreasonable to say our charges are too high. Compared with carriers in other countries, we provide high-quality coverage to all customers, wherever they are," the executive said.
According to the ministry, budget mobile carriers held about 5% of all mobile phone contracts as of the end of March 2015. This share had climbed to 13% as of the end of March 2020, but growth has been slow. There have been signs of change in the market, such as Rakuten Inc.'s April launch of a full-scale mobile phone service with a cheaper fee structure than its major rivals. But so far, this has not resulted in major fee reductions across the industry.
"More people are making calls through apps these days, so the importance of having a phone number itself has declined," said Hideaki Yokota, an executive analyst at marketing research company MM Research Institute, Ltd. "It's difficult to think that changing the MNP system will affect the market overall."
Read more from The Japan News at https://japannews.yomiuri.co.jp/
