When a market-leading tier-one service provider (NTT Docomo) says it is going to reduce mobile service plan pricing as much as 40 percent, and does not see a mass consumer response, that probably means other forces are at work.
Other cost elements might work to lessen the impact of lower recurring fees. Terms and conditions of service might be a negative. In other cases the new, cheaper plans might be complex and hard to understand. The net advantages for many consumers might therefore be less than advertised.
Granted, a shift of three million customer accounts (it is not clear whether that is a gross additions or net additions figure) not insignificant, in a market of about 177 million total accounts. Docomo might have experienced a gain of about 1.6 percent (if all the accounts were shifted from another provider).
In 2014, when Docomo says it last adjusted prices in a big way, some five million new accounts were added in 30 days.
Handset bundling might be an issue, as the new discounted rates do not include device discounts, where some rival plans did offer such inducements.
The other issue is market entry by Rakuten, about to enter the facilities-based mobile business in the fall of 2019. Rakuten already is a mobile virtual network operator.
Some customers might be waiting for what they expect will be even-better deals from Rakuten, the Japanese e-commerce and retailing giant that has been in the Japan mobile market since 2014.
KDDI, the second-largest mobile service provider in Japan, believes the next wave of growth will have to come from services beyond connectivity.
The bottom line here is that although the price reductions will shave revenue, it does not appear that the impact will be as big as some had feared. As often is the case, big price cuts come with conditions that actually limit the appeal of the plans, while allowing a service provider to trumpet big cuts.
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