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Panel to probe cutting mobile phone fees in Japan after Suga's '40% reduction' comment

The Ministry of Internal Affairs and Communications has decided to set up a research panel to discuss lowering mobile phone fees following criticism from the top government spokesman that fees in Japan are too expensive and could be cut by about 40 percent.

The ministry reached the decision on Sept. 19 at a meeting of experts in its telecommunications business policy subcommittee. The panel, headed by Hirotaka Yamauchi, a graduate school professor at Hitotsubashi University, is expected to reach a conclusion by the end of 2019.

Discussion on lowering mobile phone charges was sparked by a comment by Chief Cabinet Secretary Yoshihide Suga on Aug. 21 that there was room to decrease mobile phone fees by around 40 percent. Separately on Sept. 16, Suga said in a speech on a street in Naha in the southernmost prefecture of Okinawa that mobile phone fees were "too expensive."

"We want to cooperate with the Ministry of Internal Affairs and Communications, the Japan Fair Trade Commission and the Consumer Affairs Agency, and put full efforts into providing a mobile phone service with fees that users are happy with and which are easy to understand," Suga said.

A survey conducted by the Ministry of Internal Affairs and Communications found that the average household spent 100,250 yen on mobile phone communication fees over the year in 2017. This was over 20 percent higher than five years ago. In a separate survey comparing mobile phone fees in major cities in six countries across the world, users in Tokyo were found to be paying the most for large data plans.

However, analysts say there are political motivations behind Suga's statements on lowering mobile phone fees. One analyst noted that the House of Councillors election is approaching next year, ahead of a scheduled increase in the nation's consumption tax. Politicians are thus seeking to lower the financial burden on households, albeit by a small amount, by lowering mobile phone fees, which people are interested in as an issue close to home, the analyst said.

Mobile phone fees were previously regulated, but now phone companies can freely set them. The communications ministry has called for an end to the practice in which companies offer financial incentives to the stores selling smartphones to effectively distribute phones for zero yen, while continuing to charge users high monthly fees. By doing so, it hopes to bring down consumers' mobile phone bills. However government officials said that the measures that have been taken are "still insufficient," and there are no signs of them easing the pressure.

An official at one major mobile phone company, however, expressed concerns that excessive regulation of prices will not lead to benefits or developments for users or the communications market. Hideaki Yokota, an analyst at Japan's MM Research Institute Ltd., commented, "In a survey by our company, many people answered that mobile phone charges are high. I think Chief Cabinet Secretary Suga's comment provides some direction, but there are fears that excessively pointing out (the high fees) could distort the mobile phone market in the future." He says that the communications ministry should make adjustments together with mobile phone carriers, and create plans that many people can accept.

As the research panel heads into discussion, the Ministry of Internal Affairs and Communications is likely to face difficulties in steering the issue in an appropriate direction.

(Japanese original by Arimasa Mori, Business News Department)

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