Japan penalizes operators for excessive smartphone discounts

Japan’s Communications Ministry has imposed administrative penalties on three operators for offering excessive discounts to customers who acquired smartphones. NTT Docomo, KDDI and SoftBank must now report measures to end the practice until the end of this month, The Japan Times reports. The ministry said NTT Docomo, KDDI and SoftBank offered discount coupons to customers, a practice that it considered to be a form of buying support that violates ministry guidelines. The administrative penalties also cover Okinawa Cellular Telephone, a subsidiary of KDDI.

The ministry issued administrative penalties instead of instructions, a less strict form of action, because the three firms continued excessive discounts even after they were told to stop the practice in April. The ministry sees excessive discounts on handsets as a practice that maintains high communications services fees. Back in April, the government urged the operators to raise handset prices and instead offer discounted service plans. They responded with cheaper plans for infrequent phone users, but not for more popular plans.

The ministry said the three firms offered coupons and other discounts that made the price of a 32 GB iPhone 7 effectively zero. In addition, they provided iPhone buyers with points equivalent to JPY 10,000 in monthly communications charges, and up to JPY 20,000 for some models.

Source: Telecom Paper

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