DoCoMo and KDDI to delink fees, handsets

Top cell phone carriers NTT DoCoMo Inc. and KDDI Corp. will likely review their sales incentives and let customers choose between two options: conventional pricing plans linked to inexpensive handsets or lower monthly service fees for higher-priced handsets, industry officials said Thursday.

The option is expected to debut in the winter sales season, which gets under way in December, they said.

Mobile phone companies currently subsidize handset prices, which allows sales agents to sell some cell phones for as low as ¥1.

The practice, however, is said to disadvantage customers who keep the same handsets for a long time because they are paying the same charges as subscribers who frequently switch models to take advantage of the bargains.

Earlier this month, a study panel of the Internal Affairs and Communications Ministry recommended that cell phone operators review the subsidy-based pricing practice and make a new fee plan that is separate from handset prices in fiscal 2008, which begins next April.

NTT DoCoMo is considering introducing a new fee plan with its new 905i handset models this winter. Customers would then be able to cut their monthly payments by purchasing the higher-priced handsets.

KDDI is also set to introduce a new separated pricing plan to accompany the launch of a new series of handsets while analyzing the market's reaction to DoCoMo's move.

Softbank Mobile Corp., another leading cell phone operator, has no intention of adopting a new pricing plan for now because customers do not feel disadvantaged in terms of handset prices under its existing sales practice, which allows them to make payments in two-year installments, company officials said.