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Japanese households spent record amount on phone bills in 2017: gov't survey

This December 1995 file photo shows the premises of a South African nuclear power company that produced six nuclear weapons, in Pelindaba, South Africa. (Mainichi)

The average landline and cellphone bill for Japanese households was 122,207 yen in 2017, accounting for a record 4.18 percent of household expenses, a Ministry of Internal Affairs and Communications survey found.

    According to the ministry's Family Income and Expenditure Survey, the average spent on landlines per household in 2017 was 21,957 yen, falling 2,129 yen from the previous year while cellphone fees rose 3,944 yen to an average of 100,250 yen per household. Since the government began recording the information in 2000, it can be said that landline expenses have fallen, but mobile phone bills are on the rise. In 2000, the amount spent on phone communication fees only accounted for 2.68 percent of household expenses.

    The spike seen in the average cellphone bill is largely attributed to consumers moving from flip phones to smartphones. Along with having a higher base fee than previous mobile phone models, it's easy to rack up high data fees with smartphones by listening to music or watching videos.

    The government is also aware of the rising price of mobile phone communication. In a September 2015 Council on Economic and Fiscal Policy meeting, Prime Minister Shinzo Abe said, "Lightening the burden of things like cellphone bills on household expenses is an important issue," and he suggested that then communications minister Sanae Takaichi consider countermeasures. The ministry then requested that the three largest providers in Japan, NTT Docomo, Inc., KDDI Corp., operator of the au brand, and SoftBank Group Corp. lower their prices, and the companies complied, offering new plans for a lower cost.

    On the other hand, however, those three companies have an oligopoly, making up roughly 90 percent of the Japanese cellphone market, and it has been pointed out that their price ranges do not vary much. It is no easy task for new companies to even enter the cellphone market, as chances to receive a share of the radio waves are limited for such firms and there is a necessity for a gigantic installation investment. The communications ministry hoped that the growth of low-cost smartphone companies that offer cheaper plans by renting a portion of radio waves from the major providers would increase competition. If a customer cancels their contract with another company to move to the low-cost service, usually their bills decrease. However, the major firms are not letting their users go without a fight, and these low-cost companies only account for roughly 10 percent of the cellphone market.

    In the face of these conditions, Rakuten Inc. announced in December 2017 that it would be entering the market with a new cellphone business, and on Feb. 26 this year, submitted an application to the communications ministry for a share of the radio waves. If Rakuten succeeds, it is hoped that it will lead to increased competition to lower prices and improve services.

    Rakuten has promised inexpensive and easy to use plans, while a representative from the fee and service division of the communication ministry said, "The prevailing opinion is that the three-company oligopoly is a problem, so having a new party enter the market, stirring up competition and leading to a drop in prices is a welcomed move."

    Even then, according to the ministry's 2017 White Paper on Information and Communications in Japan, the ownership ratio of smartphones is still only 56.8 percent of the population, leaving more than enough room for the shift from flip phones to smartphones to continue. With each generation finding their own smartphone niche -- social media, video streaming and games for young people, online searches, shopping and banking for those from their 30s to 50s and for seniors, making communication like calls and texting that they used to do with flip phones -- it doesn't look like the weight of mobile phone fees on household finances will be lightening any time soon.

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