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.