Japan's Fair Trade Commission to scrutinise MNOs’ ‘high mobile rates’, paper says

19 Oct 2020

Japan’s Fair Trade Commission (FTC) plans to conduct an investigation into the pricing models and sales practices employed by the country’s mobile network operators (MNOs) in a bid to foster market competition, as part of a plan by new prime minister, Yoshihide Suga, to drive down the cost of mobile services. The Nikkei daily newspaper cites the Commission’s new chairman Kazuyuki Furuya as saying that it will intervene ‘if consumer convenience is being undermined’ and that his primary goal is to ensure that end user interests are ‘not being harmed by high prices resulting from the lack of competition or by low quality services’.

When Yoshihide Suga announced his candidacy to succeed Shinzo Abe following the latter’s resignation on health grounds, he said: ‘I want to create a framework that allows for greater competition in the [telecoms] field’. 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, Suga apparently wants to go further and his subsequent selection as PM prompted the three cellcos to signal they plan to lower their rates.

Furuya told the Nikkei that despite legal measures to separate handset sales from service fees and a crackdown on long-term contracts to level the playing field for newcomers, the ‘market share held by discount carriers has not grown’ and the current levels of competition are still not enough. ‘Network access fees [charged to new market entrants] and the lack of the market for second-hand handsets might be hindering competition,’ he said, seemingly confirming that the FTC will look into those areas. The FTC chairman did not say when the review will begin.

Japan, KDDI (au), NTT DOCOMO, SoftBank Corp