Rakuten Inc. launched an unlimited data plan for its 5G mobile phone service on Wednesday that costs less than half the price of three major companies, including NTT Docomo, Inc. Rakuten's 5G -- the next-generation wireless network technology -- unlimited data plan costs 2,980 yen per month, excluding tax. This may increase the pressure on the three major companies, which have already entered the 5G market.
The 5G plan has a flat fee and it is the same price as the current standard 4G plan, however, customers will need to have a 5G-compatible mobile device.
The three major companies' 5G plans are generally about 7,000 yen-8,000 yen per month, which is about 500 yen-1,000 yen more expensive than their 4G plans.
Rakuten said they are able to offer the new plan at a low price by cutting the costs for building mobile base stations.
However, Rakuten's 5G coverage is limited in certain areas, such as in the Tokyo metropolitan area, compared to the other three companies. Since Rakuten entered the market in earnest in April, there have been concerns regarding the quality of its services, including connectivity issues. The company initially planned to launch the 5G service in June but delayed the rollout for three months because of the coronavirus. The company needs to establish a more stable communication network to attract more customers.
Prime Minister Yoshihide Suga has expressed a strong desire to lower mobile phone fees, citing the high cost of mobile fees around the world.
"Lowering the cost by only about 10% would not be called reform," Internal Affairs and Communications Minister Ryota Takeda said.
The government is putting increasing pressure on the companies to cut their prices.
With Rakuten's new price point, the focus will likely be on how the other companies set their prices in the future for 5G services.
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