TOKYO -- The government is considering forcing Japan's mobile phone carriers to cut contract cancellation fees to 1,000 yen or less, making it easier for customers to switch companies, it was learned on June 8.
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The cancellation fee ceiling under discussion at the Ministry of Internal Affairs and Communications would be a precipitous drop from the 9,500 yen that Japan's cell carrier titans -- NTT Docomo Inc., KDDI Corp.'s au, and SoftBank Corp. -- currently charge customers quitting midway through 2-year contracts. The firms are currently free to set breach-of-contract penalties as they see fit, and the charges have been lambasted for essentially entrapping users.
The communications ministry is also pondering limiting discounts on handsets to 20,000 yen or less, and banning outright device discount offers tied to long-term contracts. This would effectively end the high smartphone price cuts currently offered by mobile carriers to tempt customers into pricey call and data plans that are the mainstay of the companies' income.
The ministry is considering implementing the regulatory changes through an updated ordinance in the autumn, coinciding with the forthcoming implementation of the revised Telecommunications Business Act mandating the clear separation of mobile device and communications charges. Ministry officials will present the package of proposed ordinance revisions to an expert committee set to convene on June 11.
(Japanese original by Akiko Kato, Business News Department)