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Telecommunication

Japan mobile fees crack as KDDI weighs no-cost switches to budget plan

Government puts pressure on carriers for discounts customers can feel

Users of KDDI's main au brand may be able to switch to the company's budget brand without paying steep fees.

TOKYO -- As Japan's government takes a tougher line on telecom price competition, wireless carrier KDDI has begun looking to eliminate fees for subscribers switching to its budget brand.

Prime Minister Yoshihide Suga has been a vocal advocate for lower mobile rates. Under such pressure, market leader NTT Docomo is poised to become the first of Japan's three leading carriers to cut prices for its main brand, Nikkei reported Monday.

Since Suga took office in September, rivals KDDI and SoftBank Corp. have introduced lower-price brands. But the government has turned its focus on the fees that carriers charge when subscribers switch to these new plans.

"Why are there so many procedures and fees just to change to a different plan within the same company?" Communications Minister Ryota Takeda said to reporters Friday.

KDDI and SoftBank charge subscribers up to 15,500 yen ($150) to switch to the budget brands -- the same as switching to another carrier.

Although the government mandated lower mobile phone cancellation fees in October 2019 to spur competition, users who signed contracts before then are excluded, so few people have switched carriers. These fees have been an important tool for the telecommunications companies to retain subscribers.

Docomo will become the first of the trio to break with this long-standing industry practice. For its budget brand set to launch next spring, the company does not plan to charge users for moving from its main brand, Nikkei reports. 

This makes it harder for rivals to claim that there are costs involved for changing service.

Asked about the government's criticism of transfer fees, a KDDI spokesperson said the company "wants to be proactive in how we address this, including the possibility of a review" of its pricing.

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