UPDATE 2-Japanese government wants mobile phone charges lowered before Rakuten enters next October
(Adds Rakuten’s comment)
TOKYO, Oct 22 (Reuters) – The Japanese government wants to see greater price competition between the country’s three main mobile phone network providers, before e-commerce firm Rakuten Inc enters the market in October next year with plans to cut smartphone costs.
Chief Cabinet Secretary Yoshihide Suga said carriers NTT DoCoMo Inc, KDDI Corp and SoftBank Group Corp have the potential to cut mobile phone charges by up to 40%.
Rakuten plans to launch its mobile service in October 2019 and aims to charge less than the three major carriers, Suga said at a regular press conference on Monday.
“By then, we want competition to pick up speed and the market dominance of the three companies to be eliminated,” he said.
A Rakuten spokesperson said the company is considering pricing at a similar level to its current wireless offering. Rakuten is currently a virtual network operator, where it leases capacity and does not own the network.
Suga also said it was “extremely important” to ensure the functioning of competition, which is the responsibility of the government.
“If the competition works, I think prices will inevitably come down,” Suga said separately in an interview with Sankei newspaper published on Monday.
The government wants household mobile phone charges to come down to help boost spending elsewhere and boost overall consumption, which has been the weak point in the economy.
But a 40% drop in mobile phone charges could slow core consumer inflation – which hovers around 1% – if users save money rather than spend.
Reporting by Kaori Kaneko; Editing by Chris Gallagher and Christopher Cushing