Mobile cancellation fee to be ¥1,000

The Yomiuri ShimbunThe Internal Affairs and Communications Ministry plans to cap the fee for canceling a two-year cell phone contract at ¥1,000, sources close to the ministry said.

This would represent a major reduction as the current cancellation fee for major mobile phone operators stands at ¥9,500. The move is aimed at making it easier for users to switch carriers and encouraging competition among carriers.

The ministry hopes to introduce the new regulations when the revised Telecommunications Business Law goes into effect in autumn.

Major carriers — NTT Docomo Inc., KDDI Corp. and SoftBank Corp. — offer packages with reduced service fees if customers sign two-year contracts.

However, if customers want to cancel their mobile services within the two-year contract period, they have to pay a penalty of ¥9,500, an amount that has been criticized as “locking” customers into their services.

The ministry also plans to introduce a limit of ¥20,000 on discounts offered by major carriers when they sell smartphones to prevent excessive price competition among the carriers.Speech

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