Japan wants mobile price war ahead of Rakuten’s launch

rakuten mobile japan
FILE PHOTO: Japan's Chief Cabinet Secretary Yoshihide Suga, Tokyo, Japan May 29, 2017. REUTERS/Toru Hanai/File Photo

TOKYO (Reuters) – Japan’s government wants to see greater price competition among the nation’s three dominant mobile phone network providers, before e-commerce firm Rakuten enters the market in October next year with plans for lower smartphone charges.

Chief Cabinet Secretary Yoshihide Suga has said carriers NTT DoCoMo, KDDI and SoftBank have the potential to cut mobile charges by as much as 40%.

Rakuten plans to launch its mobile service in October 2019 and aims to charge less than the dominant three carriers, Suga said at a regular news conference on Monday.

“Until then, we want competition to accelerate and the three companies’ market domination needs 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 at present a mobile virtual network operator (MVNO), where it leases capacity and does not own the network.

Suga also said it is “extremely important” to ensure competition works, which is the government’s responsibility.

“If the competition works, I think prices will inevitably fall,” Suga separately said in an interview with the Sankei newspaper published on Monday.

The government wants household mobile charges to fall to help stimulate spending elsewhere and boost overall consumption, which has been weak spot in the economy.

But a 40% drop in mobile charges could slow core consumer inflation – which has been hovering around 1% – if users save the money rather than spend.

(Reporting by Kaori Kaneko; Editing by Chris Gallagher and Christopher Cushing)

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