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Politics

Japan's mobile fees have room for 40% cut, top spokesman says

Suga faults lack of competition for internationally high prices

Consumers decry the practice of locking phones to specific SIM cards to keep them from switching carriers.

TOKYO -- Japan's top mobile phone carriers can lower service fees by about 40%, Chief Cabinet Secretary Yoshihide Suga said Tuesday, taking aim at the huge annual profits the companies rake in.

"I have to say that competition has not been working," Suga said in a lecture in Sapporo.

Suga's grievances stem from a government analysis showing that monthly service fees in Japan are about 50% higher than in the U.K. and France.

Prices in Japan will fall to British levels if there is healthy competition among KDDI, NTT Docomo and SoftBank Group, Suga asserted. The carriers have reported hundreds of billions of yen (100 billion yen equals $905 million) in profits at their respective mobile arms.

Japanese Chief Cabinet Secretary Yoshihide Suga speaks on Aug. 21 in Sapporo.   © Kyodo

"They are using our public airwaves, an asset of the people," the chief cabinet secretary said. "They should not be generating excessive profit, but rather return the profit to users while expanding."

Suga also touched on consumer complaints about restrictive multiyear contracts, the practice of SIM-locking devices to a particular carrier, and bundling phones with service plans. "Consumers are displeased," he said.

The comments come ahead of a key industry council meeting that the Ministry of Internal Affairs and Communications will hold on Thursday. The panel is expected to take up the issue of lowering cellphone rates, among other measures to foster competition.

Suga's comments set off speculation that rate cuts will squeeze the carriers' earnings, rattling the stock market. KDDI's stock closed 5% lower on Tuesday, while Docomo fell 4% and SoftBank 2%.

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