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Business

KDDI to slash smartphone rates by 20%

Japan's big three carriers hitting back at budget-friendly rivals

KDDI hopes to keep customers from defecting to lower-cost competitors.

TOKYO -- KDDI will lower monthly charges on smartphone plans by a fifth this summer as the Tokyo-based telecommunications giant confronts the threat of discount carriers.

The company offers mobile services under the au brand, charging 7,000 yen ($60) or 8,000 yen for popular plans offering up to 5 gigabytes of data and unlimited voice calling. While the precise cuts will vary by plan, the roughly 1,500 yen in reductions will mean average savings of around 20%.

Prime Minister Shinzo Abe told the Ministry of Internal Affairs and Communications in 2015 to urge mobile providers to bring down charges. But top three players NTT Docomo, KDDI and Softbank Group have rolled out only a limited range of discounted plans applying to just a portion of their customers. KDDI's move will likely have an impact, with the other two carriers expected to follow suit.

The company is slashing charges in response to the rise of budget smartphone services, which have been stealing customers from the big three and now together command a roughly 10% market share.

Budget providers lease circuits from major carriers, mostly Docomo because it offers lower leasing fees. This likely served as extra motivation for KDDI to act to keep customers in the fold.

(Nikkei)

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