Gov't to require mobile phone operators cut cancel fees by 90%

The government plans to impose new regulations on mobile phone operators to cut cancellation fees by 90 percent to 1,000 yen or less to make it easier for users to switch companies and spur competition, officials said Tuesday.
The move is expected to lead the country's major mobile operators to further reconsider their price plans. They have already decided to offer plans with reduced communications fees amid pressure from the government, but the cancellation charges had been left unchanged at 9,500 yen for users who quit in the middle of a two-year contract.
On Tuesday, the Ministry of Internal Affairs and Communications presented to a panel a draft ordinance revision that would set a cap on cancellation charges at 1,000 yen.
The ministry also proposed a plan to limit discounts on handsets to a maximum 20,000 yen. The ceiling would effectively end operators' discounting of mobile device purchases in exchange for relatively high data usage fees, a long-held practice criticized as leading to communications fees to remain high.
The three major mobile phone operators -- NTT Docomo Inc, SoftBank Corp and KDDI Corp -- have recently been targeted by the government over what are deemed relatively high mobile phone charges compared with other countries.
Last month, the parliament enacted a revision to the telecommunications business law aimed at lowering mobile phone fees, banning them from offering plans that cover both the price of a mobile phone and connection fees in one package.
Consumers and government officials have said the plans make it difficult to compare the fees charged by carriers.
The ministry plans to revise the ordinance around this fall in tandem with the implementation of the revised telecommunications business law. E-commerce giant Rakuten Inc. which will enter the market in October will also be covered by the new regulation.

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