Japan pushing to end handset bundling: report

23 Aug 2018

Japan's telecoms ministry is reportedly seeking to end the practice of operators bundling the cost of smartphones into wireless services and compel them to cut monthly fees.

An unnamed senior Ministry of Internal Affairs and Communications official toldReuters that the Japanese government wants operators to charge for handsets separately rather than bundling them into monthly plans.

The government aims to reduce household mobile costs to stimulate spending on other areas of the economy, the report cites the source as saying. Telecoms fees as a percentage of household spending have grown to 4.2% as of last year as a result of higher wireless costs.

Japan's chief cabinet secretary Yoshihide Suga has recently indicated that the government believes the market's operators have room to reduce prices by up to 40%, suggesting that they will be under strict pressure to slash fees.

If the MIC succeeds with its reported plan, it is meanwhile likely to hit dominant player Apple the hardest of all handset vendors.

The vendor captures around 50% of Japan's smartphone market, and requiring consumers to pay upfront could discourage consumers from purchasing its higher-priced premium devices in favor of lower cost alternatives.

According to the report, KDDI has already created plans that separate handset and monthly fees and has lowered prices for customers. Rivals Docomo and SoftBank told Reuters they have also cut costs and continue to explore ways to improve the value of services provided to customers.

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