Japanese cellcos spooked by likely rate cuts if Suga becomes PM

4 Sep 2020

With Chief Cabinet Secretary Yoshihide Suga currently leading the pack in the race to become Japan’s next prime minister, after Shinzo Abe announced his resignation on health grounds, the country’s established mobile network operators (MNOs) fear a backlash after he announced his candidacy by stating: ‘I want to create a framework that allows for greater competition in the field’.

The Nikkei daily notes that Suga is an old hand where it comes to telecoms policy and has long trumpeted the need for lower mobile service rates. As minister for internal affairs and communications in the 2000s he strove to make the industry more open and competitive, while in the role of chief cabinet secretary, he backed the 2018 campaign calling for a 40% reduction in mobile fees. Although the big three MNOs – NTT DOCOMO, KDDI (au) and SoftBank Corp – responded with the launch of cheaper plans and compliance with the removal of handset subsidies, it is thought that Suga believes the steps taken to date have been insufficient.

In response to Suga’s speech, one unnamed telecommunications executive was quoted as saying ‘I really wish he hadn’t brought up the subject like this’, while a DOCOMO official bemoaned the would-be PM’s statement, noting: ‘He said our profit margin of about 20% is too high, but plenty of other companies have similar margins’. Meanwhile, KDDI claims it is ‘constantly thinking about rates’ and a SoftBank executive claimed that lower rates would deprive it of the resources it needs to invest in 5G. Only newcomer Rakuten Mobile remains upbeat, believing that Suga’s stance could give it a leg-up as it tries to establish itself as a credible fourth operator, by introducing policies that ‘weaken’ the big three’s stranglehold.