Japan bans handset-mobile service bundles

The Japanese government has passed a new bill aimed at reducing mobile prices for consumers and stimulating competition in the mobile market. The new bill includes provisions banning operators from offering bundled device and mobile plans under a single price package.

The new law, which is due to take effect as early as the third quarter, is aimed at addressing a practice that consumers and lawmakers have complained make it difficult to compare prices between operators.

Incumbent operators NTT Docomo, SoftBank and KDDI have been under pressure to reduce their mobile charges to help alleviate the financial pressure on consumers. As part of its efforts, the government has been seeking to address the issue of mobile operators offering device subsidies in exchange for relatively high prices for mobile services.

Responding to this pressure, Docomo last month introduced a simplified fee structure that it says will have the effect of reducing mobile rates by up to 40%, and its rivals are considering following suit.

The amended legislation also introduces new penalties for companies using misleading sales tactics, as well as a new registration requirement for handset retailers for regulatory purposes.