Discontent stemming from cell phone service rates that are too expensive is deep-rooted. Developing an environment in which fees can be brought down by accelerating market competition is important.
The Internal Affairs and Communications Ministry has begun discussions on promoting competition in the mobile phone market. The ministry's panel of experts plans to study concrete measures.
Prior to the holding of the panel's meeting, Chief Cabinet Secretary Yoshihide Suga suggested an awareness of the issues regarding mobile phone rates, saying, "There seems to be room for fees to be cut by about 40 percent."
The number of mobile phone subscriptions in Japan totals about 170 million, meaning this is an era when people have more than one mobile phone. As a device that supports the daily lives of people and business operations, mobile phone services are of a highly public nature.
Suga's aim of reducing the burdens on mobile phone users is understandable.
The ratio of telecommunications charges to consumer expenditure has been rising year after year. In fact, annual household communication charges in 2017 were up by 20,000 yen from 2010, exceeding the threshold of 100,000 yen. This heavy burden is particularly felt among young people.
Nevertheless, carriers can decide their rates as they like. It is not easy to revise fees.
Prime Minister Shinzo Abe in 2015 viewed the high mobile phone rates as problematic, prompting some carriers to reduce their fees. But the rates still remain high. The prices and services offered by the three major carriers, which account for 90 percent of the market share, are almost uniform.
They have invested hundreds of billions of yen every year in the maintenance and renewal of base stations and other things. Their investment toward the practical use of 5G -- the next-generation wireless network technology -- will also increase from now on.
Improve transparency
Yet the profitability of the three major carriers is higher than those companies engaged in competition globally, such as Toyota Motor Corp. Each of the major carriers should sincerely respond to the current state of affairs in which there are strong calls among mobile phone users for carriers to return part of their profits to them.
Although the ministry is committed to promoting the spread of lower-priced smartphones, the oligopoly of the three major mobile phone operators remains unchanged.
A significant factor in the lack of progress made with promoting healthy price competition is the problem that interconnection fees, which the three major carriers charge to operators of lower-priced smartphone services when lending network space, are said to be high.
There is a system in which the ministry examines the appropriateness of the interconnection fees, but the criticism about the ambiguity in the calculation basis never ends. The ministry should make efforts to make the system more transparent so that it could lead to a reduction in fees.
Should lower-priced smartphone services become even cheaper, the pressure on the major carriers to reduce their service fees would increase.
Challenges with regard to business practices also remain. There is criticism that the so-called "two-year contract commitment" plan, under which cell phone carriers offer discounts in communications fees to customers on condition that users commit to a two-year contract, only benefits users who replace their mobile phones with new models every two years.
The revision that the three major carriers have implemented has gone only so far as to extend by one month the period within which a user can cancel the contract without a penalty for breach of contract. It must be said that such a revision is insufficient. Efforts to eliminate the sense of unfairness among users is needed.
(From The Yomiuri Shimbun, Aug. 28, 2018)
Read more from The Japan News at https://japannews.yomiuri.co.jp/
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