Japan's SoftBank and KDDI are urging the government to allow the market's operators to continue offering subsidies on handset sales, disputing the government's assertion that the practice is keeping service fees artificially high.
During a meeting at Japan's communications ministry to discuss methods to promote competition and encourage lower mobile service fees, a SoftBank official stated that the ministry would be “over-regulating” if it totally bans handset discounts, the Mainichireported.
The Japanese government has been pressuring the mobile industry to reduce tariffs. In August chief cabinet secretary Yoshihide Suga said monthly mobile fees should be reduced by 40%.
According to the report, the government believes that the current practice of offering heavy discounts on handsets bundled with mobile plans is keeping service fees high as operators raise funds to pay for the handset discounts.
In addition, a panel member argued that the practice of offering subsidies keeps the price of handsets static, and that the price charged for handsets should be reduced as they become unpopular.
But a KDDI official insisted that the subsidies are important for meeting demand from customers for lower-cost devices, and insisted they should be allowed as long as operators offer only modest discounts.
Meanwhile KDDI and SoftBank have recently introduced new plans which separate handset payments and service charges.
NTT Docomo has also revealed plans to cut mobile fees by 20% to 40% starting in the June quarter, while KDDI has also revealed plans to reduce fees and SoftBank is considering its own reductions.