NTT Docomo to lower mobile phone fees by up to 40%

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NTT Docomo Inc. has announced its new mobile phone charge plans, cutting its telecom rates by between around 20 percent and 40 percent from June 1.

The company also said Monday it will introduce simpler plans by completely separating handset and service fees. Attention is now focused on whether this full-fledged price cut launched by Japan’s largest telecommunications company will trigger a similar move among its competitors in the future.

Docomo President and Chief Executive Officer Kazuhiro Yoshizawa said at a press conference in Tokyo: “We have made our service fees simpler after receiving comments that they have been complicated and difficult to understand, preventing customers from feeling the benefits of cost savings.”

Voice call, communication data and internet access fees — which are currently charged separately — will be unified and the plans will be narrowed down to two options based on data use. The “Gigalight” plan, for which fees are charged per use, is aimed at customers who don’t use much data, while the flat-rate “Gigaho” plan is geared toward customers who use a lot of data.

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Under the Gigalight plan, customers have four data options — up to 1 gigabyte for ¥2,980 (tax not included), or $26, per month, up to 3 gigabytes for ¥3,980, up to 5 gigabytes for ¥4,980 and up to 7 gigabytes for ¥5,980. Gigaho, meanwhile, offers 30 gigabytes per month for ¥6,980 per month, just over 20 percent cheaper than the current rate. Customers must sign a two-year contract to benefit from the new plans.

Docomo will also start offering family discounts of ¥500 per month for a contract covering two family members and ¥1,000 per month for a subscription of three or more members, in addition to various other campaigns, enabling Gigaho customers to reduce their monthly fee to as low as ¥4,980 per user.

Docomo users with plans including multiple family members can benefit from a fee reduction of 40 percent. About 70 percent of Docomo customers have such family contracts covering three or more users. The company wanted users of its most popular plan to benefit most. A family of three each with different data plans can reduce their total fee by about 40 percent, from ¥17,140 to ¥10,940, according to the company.

Docomo’s decision to separate handset and service fees is in response to criticism that mobile phone carriers are adding handset discounts to their telecom rates. Docomo will announce prices of mobile handsets in May.

However, the new plans could end up becoming more expensive for some users. Also, a complete separation of fees may increase handset prices.

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