Gov’t to warn SoftBank, KDDI of smartphone discount plans

TOKYO (Kyodo) — The government plans to require mobile carriers KDDI Corp. and SoftBank Corp. to ensure that customers of their new discount plans will have their handsets unlocked for usage on any network immediately, sources close to the matter said Tuesday.

The two companies unveiled the plans last week that allow a 50 percent discount in purchasing a handset under certain conditions such as customers not switching carriers for 100 days under the so-called SIM lock.

The Ministry of Internal Affairs and Communications has judged that the restriction would effectively enclose subscribers, the sources said. It will review its guidelines as early as late October to oblige carriers to remove the lock immediately.

KDDI, which operates the “au” brand, and SoftBank announced the new plans amid scrutiny over business practices in the industry, especially on smartphone contracts, seen by Japanese regulators as stifling fair competition in an already saturated market.

The revised telecommunications law, which will come into force next month, will ban the long-held practice of discounting handsets in exchange for relatively high communications fees under one package.

By separating the handset and data usage charges, the government hopes that Japan’s communications fees, the highest among major economies, will be lowered and also allow customers to choose between carriers more freely.

KDDI, NTT Docomo Inc. and SoftBank currently control nearly 90 percent of the domestic mobile phone market.

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