Monday, September 20, 2021
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SoftBank to match NTT Docomo’s ¥2,980 smartphone plan as price war escalates

A price war between major smartphone carriers is escalating, with SoftBank Corp. unveiling new plans Tuesday that put it toe-to-toe with rival NTT Docomo Inc. and the firm’s planned price cut.

Responding to the bombshell announcement by NTT Docomo earlier this month stating that it plans to launch a ¥2,980 a month 20GB plan from March, SoftBank said it will also introduce a 20GB data monthly plan for the same price.

“Competition in our industry is very tough, so moves by our competitors are one of the factors that drove us to decide (on the price cut),” SoftBank Chief Operating Officer Jun Shimba said during a news conference.

With lower price plans now announced by SoftBank and NTT Docomo, rival telecom carriers KDDI Corp. and Rakuten Mobile Inc. are likely feeling the pressure to match them.

Calling the new deal “SoftBank on Line,” the firm said it was set to roll out an online-only brand with messaging app giant Line Corp. to release the ¥2,980 plan from March.

The new plan will include up to five minutes of free talk time per domestic voice call, with no cap on the number of calls a month, and ultrafast 5G network usage. Calls over five minutes will be charged.

All procedures necessary to subscribe are expected to be conducted online only, rather than at physical shops. Docomo’s new plan is also designed the same way.

Seeking to tap the popularity of Line, which has 86 million users in Japan, SoftBank said data used on the Line messaging app would not count toward the 20GB limit.

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“People use Line every day and that data will be outside of the 20GB count. We think this is a big feature,” said Shimba.

A YouTube screenshot shows SoftBank Vice President Jun Shimba speaking during a news conference Tuesday in Tokyo. | KYODO
A YouTube screenshot shows SoftBank Vice President Jun Shimba speaking during a news conference Tuesday in Tokyo. | KYODO

Line is set to strengthen its ties with the SoftBank group soon in a planned merger with Yahoo Japan portal site operator Z Holdings Corp., a SoftBank subsidiary, this upcoming spring.

SoftBank initially announced in late October that it would launch a new 20GB plan priced at ¥4,480 with its Y!mobile brand this month after Prime Minister Yoshihide Suga’s administration urged major carriers to lower smartphone fees, in particular to help ease financial burdens on households amid the COVID-19 pandemic.

But the government wasn’t satisfied with the new price plans and continued to relentlessly pressure the carriers.

NTT Docomo announced its ¥2,980 plan in response, apparently forcing SoftBank to rethink its strategy. SoftBank said Tuesday that it will cancel it’s initial plan for a ¥4,480 service under the Y!mobile brand.

SoftBank is also planning to sharply reduce its fees for unlimited 5G data with a ¥6,580 plan from March. The carrier currently charges ¥8,480 for 50GB.

In addition, SoftBank said it will eliminate fees for switching between its brands — from Y!mobile to the SoftBank brand, for example — in an apparent effort to evade criticism from the government. Internal Affairs and Communications Minister Ryota Takeda has blasted some major carriers for setting high fees for users that wish to switch.

With SoftBank now gearing up for an intensified race, fellow telecom giant KDDI is likely to follow suit.

Although KDDI President Makoto Takahashi criticized the government for excessive meddling, he has reportedly said the carrier will unveil new plans in January.

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Meanwhile, moves by the three largest carriers are heightening pressure on Rakuten Mobile, the fourth major carrier, which made a foray into the market this year, setting expectations that it will stir up competition in a market that has been dominated by the bigger players.

Rakuten already provides a ¥2,980 plan with unlimited 4G and 5G data use, but the carrier may now have to spice up its strategy to differentiate itself from larger rivals.

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