‘Selling Dog as Mutton’: Japan Carriers Dip on Minister’s Rebuke
(Bloomberg) -- Shares in some of Japan’s largest mobile phone carriers dropped in Tokyo after the communications minister accused the companies of deploying a bait-and-switch tactic in cutting the costs of mobile phone plans.
Reducing Japan’s hefty mobile phone bills has been a priority for the administration of Prime Minister Yoshihide Suga, but carriers have largely avoided making cuts to plans offered by their mainstay operations. Instead, they’ve made cuts at their so-called sub-brands -- cheaper operations wholly owned by the carriers, such as KDDI Corp.’s UQ and SoftBank Corp.’s Yahoo Mobile. The sub-brands offer discount plans but often not the latest phones, and are popular with students and those using less data.
“There have been no cheap plans announced at all for the main brands, which are used by most customers,” Ryota Takeda, the minister of internal affairs and communications, told a press conference in Tokyo on Friday. “They’re ‘promising mutton but selling dog’,” he added, using a Japanese expression that could also be translated as “selling vinegar as wine” or “a pig in a poke.”
Shares in KDDI Corp. erased gains and fell as much as 2.3%, while SoftBank Corp. lost as much as 1.5% after rising earlier. Japanese online retailer Rakuten Inc., which has entered the telecom market as a cheaper competitor, extended gains to as much as 4%.
Suga’s battle to lower mobile phone bills goes back at least two years when, as chief cabinet secretary under Shinzo Abe, he stunned the market by calling for a 40% reduction in mobile fees and blasted the fat profit margins at the three main carriers.
It’s a call he has often repeated upon becoming prime minister, and minister Takeda has called for bills to be cut to “international levels.” Government figures show a 20-gigabyte-data plan is more than three times more expensive in Tokyo than Paris.
The carriers have responded so far by offering cheaper 20GB plans on their sub-brands, but have left plans on their more popular mainstay brands largely unchanged.
“It’s not appropriate that they’ve just made a load of different plans and left the rest up to the customers to decide,” Takeda said.
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