On average, it's 7,000 yen a month. In fact, there was a very cheap plan in the 2000s. Docomo can't do anything if Rakuten provides such a plan. That's because Docomo will see a great loss just by reducing 1,000 yen. That's because they're investing a lot on the equipment. How are they going to maintain the huge profit? However, Sawado went forward with the plan. He thought that if Docomo reduces the price first according to the law amendment and makes a good brand image, SoftBank and au would follow after, ultimately leading to the competition that the government wants. However! The law amendment was delayed. Then what will happen? Docomo reduced the price even before the law amendment. No one understood the decision. They announced a plan called Giga Lite even before discussing about it thoroughly. However, SoftBank and au did not follow that strategy. Plus, Docomo reduced the price by only a little even before the law was amended so they didn't give much impact on the industry. The price was reduced by a little, so no one understood what they were going for. This is very much related to the second restraint of the mobile phone network industry. Didn't you find the phone discount and plans regarding the cell phone bills confusing? It's a strategy that gives phones at a cheaper price. There were even phones that cost 0 yen. By giving the phone for free, they make a contract in return. The contract allows you to divide the price and pay it together with the cell phone bill. They give the phone at a cheap price and make you pay over a long time so that they could, in return, get your cancellation charge. Even if the phone is for free, the contract lasts for 4 years. Even if your want to get a new smartphone after 2 years, you can't because of the highly cancellation cost. Isn't it heartbreaking that you can't change your phone for 4 years? Imagine you can't change your phone for 4 years in an era when there are people who get new iPhones each year. It's therefore a very indecent method. But the government basically told them to change this strategy. They strongly told the firms to separate the device price and cell phone bills. And Docomo put that into action even before the law amendment. A top student, indeed. Do you know what happened despite that? The people didn't think the way Docomo had expected. Being provided a cheaper device felt more beneficial to the consumers. We have been fooled for a very long time. The price of a smartphone ranges from 20,000 yen to 100,000 yen. It'd be pressuring to suddenly pay 100,000 yen. But for some reason, it feels as though paying it partially each month with an additional 2,000 yen feels more beneficial. Most consumers thought this benefited them more. However, Docomo was not able to provide device discounts because of its separation with the payment plan. This lead to the tremendous decrease in the phone sales of Docomo. Meanwhile, au and SoftBank gave discounts so Docomo ended up seeing a huge amount of loss. This is what happened when they simply did as told by the government. So Docomo lost a lot of profit. SoftBank was the best in using the strategy that people love phones being sold at a cheaper price. Their plan did not work out due to Docomo's mistake and Rakuten's delay. Moreover, SoftBank thought of a loophole when the government and prime minister made policies regarding this. Doesn't SoftBank have that image? It has that witty brand image. The same goes for its ads. Even back in 2007, the strategy of preventing consumers from using another network carrier by making them sign a 4-year contract or use a certain phone bill plan with a device discount for several years has been criticized. So Yasuhiko Taniwaki, the one who was in charge of this business in the Ministry of Internal Affairs and Communications in 2007, ordered them to separate the two. However, SoftBank found a loophole to this as well. They were really clever. They announced something called New Super Bonus. What is it? It doesn't join the phone bill and device payment together, but by giving a high discount for the phone bill it made the consumers believe that it is equally beneficial as the device discount. They didn't say this but it was a discount that seemed equally cheaper. In other words, they thought, why not reduce the phone bill instead? Hence, SoftBank came up with a legal strategy that made the law meaningless. Unfortunately, au and Docomo followed that strategy, so the phone bill and device payment weren't separated in the end. In 2019, after the law about the two's segregation was amended, SoftBank came up with something called "Half Price Support +". What is it? It does segregate the two. It doesn't make the consumers use a certain plan for its discount. It separates the two, but only requires half the price. It simply gives a device discount. You must think that you can buy just the phone from SoftBank. However, they'll lock the phone with SoftBank's USIM for 100 days after purchase. Who would ever wait for 100 days? You'll just continue using the USIM in the end. So according to the rule, it was okay to lock their USIM on the device for 100 days. This was law specially made to protect entrepreneurs. SoftBank used this and discounted the phone price. But they cleverly decided to lock the USIM for 100 days. However, the government interfered yet again and said that shouldn't be done. Actually, the government and the Ministry of Internal Affairs and Communications already interfered a lot for this policy. So this is a huge issue. But the government really just wanted to change this policy. Suga is famous for his great skills in controlling people. He controls government officials of the Cabinet Bureau of Personnel Affairs. So the government basically changed what the Ministry of Internal Affairs allowed SoftBank to do. It was a battle. "Please do it, Rakuten!" "Sorry, we're gonna be late!" "What are you doing!" "Please do it, Docomo!" "Sorry, we failed!" "What are you doing!" "What's SoftBank doing? They shouldn't do that!" "Don't you think that's overboard?" "It wasn't illegal. The Ministry of Internal Affairs and Communications gave us permission!" The expected new student is late, the top student trips, and the disorderly student is behaving recklessly. It's just a mess. However, the school principal continues to push through. The whole school becomes a mess. People would think the school principal is incompetent. Amidst all this, there was the COVID-19 breakout and everything got delayed. 5G is also experiencing a delay worldwide. Despite the distribution of cheap smartphones, 5G still cannot be widely distributed. This is a risk because the current Japanese economic system is preventing change. I mentioned that this is the oligopoly of the three major network carriers. Also, consumers cannot break out of the 4-year contract, device discount and family discount. The family discount really holds you onto that network carrier, so it's difficult for consumers to change their service. They might have to pay the cancellation fee and affect other family members. They can't easily change the carrier. Plus, we don't feel the need to change to a cheaper plan because we've been using the 4-year contract, family discount and device discount our whole lives. It's bothersome. So we mostly think that maintaining this state would be most beneficial. This is called the status quo bias. Therefore, the cause of Docomo's mistake partially lies in the wrong timing of governmental intervention. The other half lies in the fact that the people didn't understand. In other words, the people didn't think Docomo's strategy is cheaper. We were pushing ourselves toward the device discount trick. As that worsened, we got the structure that we have today. Next is the fixed monthly income. The author claims this to be a very serious problem. The price is too high despite it being a infrastructural business. Because of the extremely high price, the network carriers don't have to change anything in order to gain profit. What does this mean? They don't care about the consumers. The services aren't really for us. They don't care what the consumers like or dislike. They can maintain the profit because only these three network carriers control the infrastructure. As new laws emerged and they found new loopholes, the Japanese network industry turned into a mess. There are more issues. Some problems were caused because we're not used to device discounts. It's about iPhones. Have you heard that the distribution rate of iPhones in Japan greatly increased? In other more developed countries, Android phones are more prevalent. You must've heard that iPhones aren't really distributed because of their high price. But why is it so distributed in Japan? This is it. As the major network carriers discounted the phones, they sold iPhones at a cheaper price so there was no proper competition between the devices in Japan. Basically, Japan is the only country that sold Mercedes-Benz cars in a bargain sale. It was later revealed that there was a backdoor deal regarding the iPhones. The three major network carriers were desperate to sell iPhones back then. There was such a time. When they were desperate to sell iPhones, Apple suggested a backdoor deal that they sell iPhones at a discounted price. This was later revealed by the Fair Trade Commission. Although Apple claimed to have rectified the deal and didn't go forward with it it took so long to find out about the backdoor deal. This led to a tremendous increase in the sales of iPhone. So the status quo bias made the Japanese people think that they should continue using the expensive iPhones and that they don't have to change their carrier to a cheaper one. The Japanese people currently think that it's best to be able to continue using what they have so both the network carriers and smartphone manufacturers are not willing to change. The consumers would continue to buy their products even if they maintain this system. So we cannot progress further. Moreover, due to the pandemic, we cannot really think about these issues. We once were angry that the 1,000 days of battle did not show much progress. We were furious that the government and three major carriers didn't seem to be doing anything. But they were, in fact, having this fierce battle with each other. They were quietly fighting with Apple as well. Despite all that, we were all just spacing out. We were just content at what we currently have. Don't you feel alarmed now? We must think whether our cell phone bills are too expensive and whether certain phones are being sold at the appropriate price before we choose a service and voice out our opinions. Phones are an infrastructure for all. They are needed for us to contact our children and communicate with each other during emergencies. We should wonder why such a necessity is being sold at a high price and why its sellers are gaining so much profit. If we don't raise our voice, Japan won't have a normal economic state. We're thinking about how 5G is provided in too small an area, but this isn't what we should think about. We should voice out that we need to make progress. We should set up enough antennas around the country, see how mobile network businesses work in other countries, check out the progress of 5G businesses in the world, and raise our voices toward politicians and network carriers in order to bring change to Japan. As it's about mobile phones, antennas are very important! Then, bye! A web community, PROGRESS. [Atsuhiko Nakata's online community PROGRESS, 3,700 members, 980 yen a month]
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