Japan government begins talks to cut mobile phone penalty charges

May 22, 2019

Tokyo--An expert panel of Japan's communications ministry Tuesday started discussions to address mobile phone service providers' practice of preventing users from switching to other companies with fixed-term contracts.

The expected main topic will be how to lower penalty charges imposed for early contract termination. The panel will work out details around summer to revise a ministerial ordinance based on the telecommunications business law.

Under typical contracts, subscribers have to pay some 10,000 yen in penalties if they terminate two-year contracts before a designated three-month renewal period preceding the contract expiration date.

Some panel members were critical of the system. "The current level of the penalty fees is too high," a member said.

At the meeting, the ministry explained that if subscribers choose a fee plan different from two-year contracts, they have to pay basic monthly voice call rates more than 1,500 yen higher. The high rates effectively block subscribers from adopting such a plan.

Ways to ban carriers from excessively discounting handset prices are also expected to be discussed.

The panel will collect opinions directly from major providers later.

The ministry hopes to promote competition among service providers by allowing subscribers to switch to other companies more easily.

Under the revised telecommunications business law, carriers must separate handset prices from communications fees as early as autumn, a measure aimed at making it easier to compare fee plans offered by various companies. Jiji Press