KDDI’s Tadashi Onodera says rebates must stay

20 Sep 2007

Reacting angrily to a recent government report calling for the cellular industry to terminate the practice of offsetting handset discounts with higher service charges, KDDI Corp’s President Tadashi Onodera says Japanese mobile operators must be allowed to continue offering rebates. Onodera criticised the plan saying ‘Amid free competition among three carriers … I feel odd about the government-backed decision.’ He went on to cite the experience of South Korea where a similar initiative ended in failure and resulted in a return to a subsidies system where service providers pay rebates to retailers in exchange for heavy discounts on handsets. The KDDI warned that if rebates were abandoned, handset sales could decline resulting in the possible closure of many retail outlets. ‘We need to avoid such a vicious circle,’ Onodera said.

Japan, KDDI (au)