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Japan panel urges total split of handset and service prices

Reform aims to bring greater transparency to mobile plans

Consumers check out smartphones at an electronics retailer in Tokyo.  

TOKYO -- A government panel promoting deregulation called for complete separation between mobile phone prices and service charges in a report submitted Monday to Prime Minister Shinzo Abe.

Japan's major carriers have long packaged those two sets of prices together to offer discounts on phones, a practice that has drawn criticism as lacking transparency.

NTT Docomo, KDDI and SoftBank Group are moving to draw a line between those payments. Still, the Council for Promotion of Regulatory Reform maintains that their efforts are not enough, noting a sense of unfairness created among consumers. Service charges applied to all customers are used to bring down handset prices, disproportionately benefiting frequent buyers of phones, critics argue.

The deregulation panel also calls for a framework for online education in remote islands using information technology, the consolidation of stock and commodity exchanges around fiscal 2020 and the simplification of paperwork for Airbnb-style room rentals.

"I want to quickly enact these reforms," said Abe after receiving the panel's report. The government will compile detailed plans by March 2019.

The total separation of payments for mobile devices and services could lead to reductions in telecommunications charges in the country, analysts say. It is also expected to give consumers more options, like combining a carrier's service with a used phone. In such a case, Docomo now requires the purchase of specific phones.

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