Japan signals new legislation to curb phone subsidies

The Japanese government will review a plan to cut mobile phone rates and curb excessive competition in handset discounts among carriers.

Sanae Takaichi, Japan's minister of internal affairs and communications, has said the world's second largest economy is looking to limit handset discounts to both lower data fees and make data pricing more transparent.

Takaichi told The Nekkei, the world's largest financial newspaper with a circulation of 3 million daily, that something must be done in Japan to curb excessive competition among carriers in handset discounts and the rising cost of mobile fees to relieve the financial burden on households. The move appears to echo similar action last year in South Korea when its Mobile Distribution Act took effect in October 2014.

Japan's ministry in charge of regulating the nation's telecommunications sector is reviewing a plan to cut mobile phone rates, and will deliver its conclusion in December. Takaichi reportedly told The Nekkei: "I hope the rate cut plan will increase the disposable income of households".

In September this year, Japanese Prime Minister Shinzo Abe signalled the government will pass legislation to ease the financial burden of wireless fees on Japanese households. But the government's openness to regulating private sector data pricing has also created some controversy.

Japan's internal affairs and communications ministry is also seeking to address an apparent lack of transparency and sense of unfairness in data pricing among the Japanese public.

Japan's NTT Docomo is among the operators that sell phones made by companies like Apple and Samsung for a fraction of their actual cost to attract customers to their mobile plans.

Docomo is able recoup the deep discounts by charging high long-term data rates to subscribers. But that comes at a cost to a household's monthly budget, Takaichi said in the interview.

Mobile communications spending has grown to 4.4 percent of the household budget of an average Japanese family of two or more -- a 20 percent increase over the last 10 years, according to the Ministry of Internal Affairs and Communications Household Survey.

Source: ZDNet.co.kr