Japan bans handset-mobile service bundles
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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.
Questions & Answers
Q.What is the primary objective of the new bill passed by the Japanese government?
What is the primary objective of the new bill passed by the Japanese government?
The new legislation aims to reduce mobile prices for consumers and foster greater competition within the mobile market. It seeks to address concerns that bundled device and service plans made price comparisons difficult for consumers.
Q.Which specific practice does the new law prohibit operators from engaging in?
Which specific practice does the new law prohibit operators from engaging in?
The new law prohibits mobile operators from offering bundled device and mobile plans under a single price package. This targets the practice of offering device subsidies alongside relatively high mobile service prices.
Q.When is the new legislation expected to come into effect?
When is the new legislation expected to come into effect?
The new law is scheduled to take effect as early as the third quarter of this year. This timeline suggests a relatively swift implementation of the amended regulations across the mobile market.
Q.How have incumbent mobile operators responded to the pressure to reduce mobile charges?
How have incumbent mobile operators responded to the pressure to reduce mobile charges?
Docomo recently introduced a simplified fee structure, which it states will reduce mobile rates by up to 40%. Its rivals, SoftBank and KDDI, are currently considering following Docomo's lead with similar measures.
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