Firms should reduce mobile phone fees with simpler payment plans

The Yomiuri ShimbunIt will be a major step toward spreading fair, understandable mobile phone fee plans.

The Internal Affairs and Communications Ministry has decided to oblige relevant businesses to completely separate mobile phone handset prices and communication fees. It will also ban imposing high penalties on mobile phone users with the aim of preventing them from terminating their contracts before expiration.

This reform is in line with an urgent proposal compiled by an expert panel with the ministry. The ministry plans to submit a bill to revise the Telecommunications Business Law to the ongoing ordinary Diet session.

If it is implemented, payment plans combining handset prices and communication fees as single units, which is a prevalent practice in the industry, will be abolished in principle. As a result, it will become impossible to provide users with discounts on communication fees that are contingent on purchasing handsets or discounts on mobile phone prices that are contingent on accepting a “four-year contract commitment” under which phone devices are sold on a four-year installment plan.

Such contracts, intended to make users remain loyal, have allowed the three major mobile phone carriers’ continued monopolization of the market.

As early as this fall, online retail giant Rakuten Inc. plans to enter the mobile phone business. It is hoped that the planned reform of fee plans will enhance competition in the mobile phone market.

Benefit users

Excessive discounts on handset prices provided by payment plans combining handset prices and communication fees have been criticized for leading to communication fees being stuck at a high level. This is because the financial resources for handset price discounts are supplied by higher communication fees.

This practice can cause financial losses for people who keep using the same handsets for a long time. It is of more than minor significance to correct the situation. If the existing complicated fee systems are simplified, consumers can compare various handset prices and communication fees more easily. It will also help them choose plans that are suited to them.

Essentially, it is not desirable for the government to intervene in the process of deciding mobile phone fees. Yet it is inevitable as long as the situation has yet to be improved as hoped.

On the other hand, it is anticipated that the prices of most smartphone handsets will soar. It is highly likely that popular products, such as the iPhone by Apple Inc. of the United States, will be particularly influenced by the reform.

Mobile phone carriers should boldly reduce communication fees so that users will feel the new plans are beneficial to them.

The other key point of the reform is tougher regulations on mobile phone sales agents. These agents will be required to be registered.

The communications ministry will be authorized to issue business improvement orders if sales agents offer excessive discounts on their own when selling handsets or if they attract consumers in misleading ways.

The ministry so far has provided administrative guidance to mobile phone carriers over providing excessive discounts, such as selling devices for effectively ¥0. Yet the measure does not deal with discounts that sales agents individually provide. It is understandable that a certain degree of restrictions will be imposed on sales agents.

There have been countless complaints about mobile phone-related contracts. The device is part of the indispensable infrastructure of our lives. Mobile phone carriers and sales agents must expedite making contracts transparent with an awareness of the need for the device.

(From The Yomiuri Shimbun, Feb. 7, 2019)Speech


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