Japan considers slashing mobile phone cancellation fees to encourage switching

10 Jun 2019

The Mainichi newspaper writes that the Japanese government is mulling plans to compel the country’s mobile network operators (MNOs) to slash contract cancellation fees from the current figure of JPY9,500 (USD87.8) to JPY1,000 or less, to make it easier for customers to switch service provider. The Ministry of Internal Affairs and Communications (MIC) has been tasked with reviewing the current rules which have allowed the likes of NTT DOCOMO, KDDI (au) and SoftBank Corp to continue charging the punitive sums to anyone wishing to terminate their contract mid-way through the standard two-year term. There are no rules in place to regulate how MNOs levy breach-of-contract penalties, and as such, they stand accused of essentially entrapping users. Further, the paper notes that the MIC will also look to review limiting discounts on handsets to JPY20,000 or less, and the banning of device discount offers tied to long-term contracts. It is understood that the ministry is considering implementing the regulatory changes through an updated ordinance in the autumn, coinciding with the forthcoming implementation of the revised Telecommunications Business Act mandating the clear separation of mobile device and communications charges.