Japan’s three mobile operators – NTT Docomo, KDDI and SoftBank – have been given administrative penalties by the communications ministry for offering customers excessive discounts on smartphones.
The three companies reportedly gave customers coupons to buy smartphones, a type of subsidy that violates government guidelines, the Japan Times reported. The penalties, or administrative action, require that the three develop and submit measures by the end of the month to the ministry on how to end the practice.
The operators, despite being warned about the discounts in April, continued to offer the excessive discounts, the Ministry of Internal Affairs and Communications said. It noted the companies’ handset subsidies, for example, allow customers to obtain the 32GB iPhone 7 for free.
The ministry believes that excessive handset subsidies contribute to high mobile tariffs and earlier in the year announced plans to put pressure on the three mobile operators to reduce mobile tariffs and give customers a wider variety of data plans.
The three have introduced low-cost plans but only for customers using small amounts of data and voice each month.