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Top Japan mobile carrier NTT Docomo to slash data prices

  • December 1, 2020
  • , Nikkei Asia , 6:13 a.m.
  • English Press

TOKYO — Japanese wireless carrier NTT Docomo is finalizing a plan to lower mobile fees, a move that could prompt rivals to follow suit in a country said to lag in telecom price competitiveness, Nikkei has learned.


Under a revamp to be announced soon, customers will be charged based on the data they use. Customers who use 30 gigabytes in a month, for example, will pay less than the current fixed monthly rate of 7,150 yen ($69) under the new pricing.


This will make Docomo the first mobile company in Japan to cut prices for its main brand. The move is in line with a government call for lower mobile rates, which are relatively high by international standards.


Japan’s top mobile carrier by subscribers also will offer a new budget brand providing 20 GB of data for around 3,000 yen, or $29, a month. This is less than the roughly 4,000-yen 20 GB plans that rivals KDDI and SoftBank Corp. have announced under their respective budget brands.


The revamped pricing will replace Docomo’s current plans: a four-tier system with monthly rates based on usage, up to a cap of 7 GB, and a flat-rate plan for heavier data users.


Customers will be able to sign up for the new brand online and download the necessary apps themselves, helping the company keep its new prices down. Docomo also will consider price cuts to its 5G plans.


“It is true that we are considering various options,” a Docomo representative said when asked for comment on its pricing plans.


Docomo has been preparing its new rate plan in secret, with an eye on its competitors.


“We are going to make a bold move,” said a senior executive who requested anonymity.


Attention now turns to whether KDDI and SoftBank follow suit.


Prime Minister Yoshihide Suga has made it clear that he wants to see mobile service fees brought down on his watch. Under pressure, the nation’s top three carriers have all signaled they plan to lower their rates.


KDDI and SoftBank have limited their rate reductions to separate budget brands, a strategy called out by Communications Minister Ryota Takeda on Friday. If carriers “don’t cut prices for their main brands, the public won’t feel the difference,” Takeda said.


The minister has called the budget brands “completely meaningless,” saying that switching to these new options entails high fees.


Docomo’s price cut likely also puts pressure on Japanese e-commerce group Rakuten, which has launched a bid to become an alternative to the three established mobile carriers. Rakuten offers a “no limit” data plan for 2,980 yen a month.


With a less built-out network than its rivals, Rakuten has faced complaints over poor connections in some areas. Now the telecom newcomer will face stiffer price competition from the market leader.


Japan had the highest prices for 20 GB mobile plans out of six cities in an international survey, according to the Ministry of Internal Affairs and Communications.


Docomo, a component of the Nikkei Stock Average, is set to be delisted following a takeover by its parent Nippon Telegraph & Telephone.

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