NTT Docomo Inc. said Monday it will cut its mobile phone charges by up to 40 percent from June amid the government's call on telecom carriers to lower service fees.
NTT Docomo will introduce two basic service charge plans with a monthly fee of 5,980 yen ($53) for an unlimited data service and 1,980 yen for those who need less volume of data.
The major mobile phone company is looking to counter low-cost wireless service providers UQ Mobile and Y!mobile brands launched by domestic rivals KDDI Corp. and SoftBank Corp. respectively. NTT Docomo does not have a budget service brand.
The company will offer simpler plans by separating charges for handsets and services, as major wireless carriers in Japan are often criticized for their complicated plans which make it difficult to compare fees with those of other carriers and discourage carriers from cutting charges.
The issue came under the spotlight last year when Chief Cabinet Secretary Yoshihide Suga urged mobile phone service operators to cut fees, as the rates are higher than those in other countries and the three major cellphone companies generally log higher profit margins than those in other industries. Suga declined to comment Monday on NTT Docomo's new service fees.
"We will introduce simpler and more reasonable service fee plans after receiving many voices that they have been complicated and difficult to understand," NTT Docomo President Kazuhiro Yoshizawa said at a press conference in Tokyo.
The introduction of the new service charges will reduce the company's income by as much as 400 billion yen per year, Yoshizawa said.
"I recognized some moves (within the government) but we decided to launch the new fee plans to become the leader in the mobile phone market," he said.
Japan's mobile fees are relatively high. It costs about 7,000 yen a month to use 20 gigabytes in Tokyo, the most among comparable cities including New York, London and Seoul, according to data from the Ministry of Internal Affairs and Communications.
Japan's mobile phone market has long been dominated by the top three carriers, which together control nearly 90 percent of the market.
In April last year, the government granted approval to e-commerce giant Rakuten Inc. to enter the business from October this year, a move expected to spur greater competition.