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Gov't committee emergency proposals seek to end misleading mobile phone contracts

A mobile phone user plays a game in this file photo. (Mainichi)

TOKYO -- Mobile phone retailers would have to keep handset prices and monthly call and data fees entirely separate under rules proposed by a Ministry of Internal Affairs and Communications expert committee on Nov. 26.

The emergency recommendations also included a mandatory retailer reporting system that would enable the ministry to issue business improvement orders for shops that engage in such practices as offering excessive discounts. The communications ministry has accepted the proposals, and will consider policy responses -- including potential revisions to the Telecommunications Business Act.

The recommendations pointed out that mobile phone payment plans are extremely complicated and difficult for customers to understand, and called for the contracts to be simplified. Currently, the document states, the differing handset discount rates set by mobile phone firms create market inequities.

Furthermore, the practice of offering steep price cuts on hardware in exchange for the client signing a four-year communications contract unreasonably restricts consumers and also requires radical re-evaluation, the committee wrote. Ending the extremely high penalties charged to customers who cancel their contracts was also demanded.

The committee furthermore assailed marketing practices by retailers that invited misunderstanding and confusion over the actual cost of handsets and carrier fees, such as advertising phones for "essentially 0 yen."

The panel said that the government should continue entrusting major mobile phone firms with issuing improvement instructions to problem retailers. However, because those companies have not implemented these directives thoroughly, the expert committee called for a new system to provide administrative authorities with a clear and detailed picture of all mobile phone retailers in business so that the government can step in if needed.

"Japanese people are keenly interested in problems with the mobile phone market. I'd like to move quickly on the issue, including seeking comments from the public on those proposals," said communications minister Masatoshi Ishida, indicating his desire to see the legal revisions enacted.

The ministry expert committee has been discussing mobile phone policy with the aim of issuing a midterm report around March next year. However, the body judged that mobile phone prices and contracts required urgent attention, and put together the Nov. 26 emergency proposals.

The government's Administrative Reform Promotion Council has also already issued reports demanding the complete separation of mobile phone handset prices and monthly carrier fees.

(Japanese original by Arimasa Mori, Business News Department)

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