Photo/Illutration An au mobile shop in Tokyo in March 2020 (Asahi Shimbun file photo)

All three of Japan’s major mobile carriers are launching new, lower-cost plans at the behest of the Suga administration, which has been seeking consumer-friendly price reductions through more competition.

But the cheaper price plans on tap are all turning out to be about the same cost in the end.

KDDI Corp., operator of the au mobile brand, announced on Jan. 13 that it will launch a monthly 20-gigabyte smartphone plan called “povo” at 2,480 yen ($23.83), excluding tax, in March.

KDDI set the new price 500 yen cheaper than competing plans unveiled by rivals NTT Docomo Inc. and Softbank Corp. last December. But the povo plan does not include the option for unlimited calls lasting under five minutes.

If this service is added onto the plan, then each of the new plans by the big three mobile carriers are effectively set at the same price level.

The povo plan will be provided under the au main brand. The plan has additional options, such as unlimited data use over 24 hours, which is priced at 200 yen per use, and the unlimited calls under five minutes, priced at 500 yen a month.

Despite the overall similarities in the new price plans on offer from the big three carriers, KDDI is claiming bragging rights for having the cheapest option.

“We set the cheapest price at 2,480 yen and created a plan we can pour more ideas into,” said KDDI President Makoto Takahashi. “First of all, we established a framework to be able to fight with our competitors.”

For existing plans with unlimited data usage, KDDI will combine its current 4G and next-generation 5G plans starting from March. That will drop the current price by up to 2,070 yen a month to at least 6,580 yen per month.

Following a request by the Suga administration, KDDI and Softbank initially announced that they would launch 20-gigabyte plans priced at around 4,000 yen, excluding tax, through their flanker brands.

But telecommunications minister Ryota Takeda demanded that the two mobile carriers lower prices for their main brands, forcing them to reconsider their plans and pricing.

After that, NTT Docomo announced its new “ahamo” plan at 2,980 yen. Other companies followed suit with similarly designed plans.

Compared to the prices of the current plans offered by the three big carriers, the newer plans managed to drop the price by about 60 percent in the 20-gigabyte plan range. That means many consumers could feel their wallets get a little heavier--but that feeling may not last.

“5G will become mainstream in mobile communications,” said Hideaki Yokota, an executive analyst at MM Research Institute. “Those (mobile carrier) giants have strategies to first let users get used to using a lot of data under a 20-gigabyte plan and then lure them into the larger-data plan.”

Meanwhile, Rakuten Mobile Inc. got into the mobile carrier business last spring and priced its lower-cost plan cheaper than the incumbents. But now, the prices of the four competitors have leveled off to be almost the same.

Rakuten Mobile has attracted a lot of attention over what moves the new entrant may make that could shake up the industry.

(This article was written by Ryo Toyoka and Ryo Inoue.)

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