KDDI to change practices after regulatory pressure

02 Aug 2018

Japan's KDDI has revealed it plans to change its business practices governing smartphone contracts, in response to pressure from the market's regulators.

Japan's communications ministry has directed the market's operators - KDDI, Softbank and NTT Docomo – to stop charging customers for switching to a different provider at the end of their two-year contract, the Kyodo news agency reported.

The operators currently require porting customers to pay charges for an extra one-month period to end a contract of pay the penalty by canceling the contract before it matures to prevent it from being automatically renewed.

Regulators consider this practice to be stifling fair competition in a saturated market, the report states.

KDDI will comply with the demand, and also plans to end its four-year smartphone payment plan contracts, the company revealed in a press conference. These plans currently allow customers to switch to newer devices after two years and have the remaining payments waived if they agree to sign up to another four-year payment plan.

Softbank is expected to follow suit with its own business practice changes, while NTT Docomo is currently evaluating its own response to the regulators, the report adds.

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