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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • Ministry Orders NTT DoCoMo to Alter Telecom Charges
  • January 28, 1999 (TOKYO) — The Ministry of Posts and Telecommunications on Jan. 22 ordered NTT Mobile Communications Networks Inc. (NTT DoCoMo) to change the discount rates for its monthly fixed charges called “Family Discount.”
    This was the first such order issued by the ministry. NTT DoCoMo is Japan’s largest operator of mobile phone services.

    NTT DoCoMo will change the discount rates in March. However, some customers using the Family Discount plan may suffer some disadvantages, the company said.

    Family Discount was started in December 1998. For users with more than one mobile phone or personal handy-phone system (PHS) subscription under the same holder’s name, a 5 percent discount is applied to the first mobile phone plus a long-term contract discount. Additionally, a flat 15 percent discount is applied to the second through fifth mobile phones or PHS handsets.

    The ministry regards as questionable the discount rate to be applied to the second through fifth mobile phones. As the basis for the 15 percent discount, NTT DoCoMo cites the economies of scale in operating costs through long-term use, but the discount rates are not in proportion to the length of a subscription period. For that reason, the ministry decided that the scheme is a “discriminatory rate” in favor of Family Discount users.

    NTT DoCoMo argued that the methods of refunding revenues from discount services should be left to the judgment of business enterprises, and that issuing orders to change the rates goes against the current of deregulation.

    The ministry’s order was issued on the basis of the new method of application of regulations on telephone charges stipulated in November 1998. However, no clear criteria for issuance has been seen.

    Commenting on this vague situation, an NTT DoCoMo official said, “In order to avoid the risks of receiving orders for changes, common carriers are likely to talk to the Ministry of Posts and Telecommunications before filing reports on telephone charges, yet that could be an obstacle to free establishment of fees.” The official requested that clear-cut guidelines be established.

    “The criteria will gradually take a definite form as we encounter actual cases, including this one,” a ministry official said.

    (Nikkei Communications)

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