MIC considers wholesale fees cut to encourage budget carriers

26 Sep 2016

Japan’s Ministry of Internal Affairs and Communications (MIC) is considering cutting the wholesale fee charged by the country’s three mobile network operators (MNOs) – DOCOMO, Softbank and KDDI (au) – for budget smartphone operators wishing to access their networks. According to unnamed sources cited by The Yomiuri Shimbun, the MIC is looking to drive competition in the local market by making it easier for users to switch from MNOs to budget carriers and MVNOs, and lower communication charges in the domestic market as a whole. A cut in wholesale access fees would bolster budget operators by helping them strengthen their management base and lower charges for customers.

In April this year the ministry issued new guidelines requesting that the big three desist from offering what it considered to be ‘excessive’ discounts such as selling new handsets at virtually zero cost. The MIC notes though, that whilst the current fees are calculated using a formula based on its own ordinance, those rules still allow the MNOs to make what it considers to be too much from wholesale fees – a situation it intends to redress. Moreover, the ministry will seek to reduce the time a carrier has to unlock a SIM card (presently six months from date of purchase), as a further measure to strengthen competition. The major carriers typically charge JPY7,000 (USD69) per month for ‘unlimited’ voice calls and 5GB of data, compared to no-frills rivals that can be as cheap as JPY2,000 on a data-only contract.