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Japan's antitrust watchdog sees 4-year payment plan for smartphones as problem

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37 Comments
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This is wrong and not wanted. two year contracts and 24 month payments but after that the phone belongs to the customer. Also the contract ends but the customer must actually inform the provider otherwise a new contract is required. My wife had her previous iPhone 6 for about 30 months before we upgrade to an iPhone 7 plus which again is on the two year contract.

4 ( +4 / -0 )

In a manner of speaking these carriers are extorting money from their customers under the guise of getting something for "free". Too many customers see the two years "free" and think that they are getting a bargain, but in effect are saddled for a total of 6 years of payments to one carrier.

I would say it's more than a "problem".

6 ( +6 / -0 )

This is why I use a sim free phone and buy the service separately. 3GB internet and phone number for less than 2000 yen a month. My cell phone bill has never looked so good.

6 ( +7 / -1 )

Or just save yourselves all the hassle that seems to come with phones by not having one. I lost mine 9 years ago, realised i didn't need one, and have never replaced it.

Looking around on trains at all the phone zombies and the content consumed on phones - was the best decision ever.

5 ( +7 / -2 )

Hmm, while it is true that shibari are unfair, the driving force behind the switch from two to four year payment plans is the exhorbitant cost of premium phones like the iPhone. What used to cost 65000 now costs 110,000. Paying it off over four years lets people kid themselves they are not shelling out a lot of money. Renting a new car on a lease is the same. Its the pretend its clever form of debt.

5 ( +5 / -0 )

I don't use a smartphone right now, but if I wanted one I'd rather save and buy a new one myself, rather than getting into that kind of contract with J-operators.

4 ( +4 / -0 )

Yeah, the whole phone contract system is scam and needs to be rectified. I took out a two year contract on a new phone with SoftBank. When you make the contract they show you very clearly how your repayment is structured including 24 payments for your device, including interest. However, after 24 months my monthly payment did not change. The monthly payment for the phone was still included. I challenged them about it and they just looked at me as if to say, “so, what’s your problem?” I explained to them that after 24 months my phone is paid for and the installment should be deducted from my monthly bill. They told me that it is ‘ ‘normal’ that your payment doesn’t change even though you have paid for your device. I looked into it deeper and asked around people I know who have contracts with different carriers. They all had the same situation. It’s a blatant rip-off and another case of paying money for nothing to a Japanese company. It’s no wonder the telcos are such rich companies. They are ripping people off blindly and taking huge amounts of money for nothing!

7 ( +7 / -0 )

darknuts

as you have previously posted you also don't use the phone much for calls. The first priority for us is the phone and we have reduced our total phone costs from a previous ¥10,000 to about ¥2500.

Do the hustle

I know who have contracts with different carriers. They all had the same situation.

that was not our case with AU.

1 ( +1 / -0 )

Nice to see the FTC taking the side of the consumer here. I think the carriers are aware that their ability to "monopolize" customers is going to end relatively soon.

2 ( +2 / -0 )

This two or four years serfdoom system is so outdated and nonesense. When is it that Japan will move forward and let his customers buy their own preferred phone at once, SIM free, and offer them really competitive and different mobile service plans with standardized like the rest of the world...? So that can employ as many phones as he likes with the same sims. Real competition. Real mobile and communication services...

3 ( +3 / -0 )

Roger Jolly

This two or four years serfdoom system is so outdated and nonesense. When is it that Japan will move forward and let his customers buy their own preferred phone at once,

You can do that now. Buy your phone and make a contract or not pay a contract. You can also buy SIM free phones.

2 ( +2 / -0 )

NTT/DOCOMO pure evidence why monopoly is always bad, terrible service for upscale price. I hope one day Japan will disband NTT and put all their management to jail

2 ( +2 / -0 )

What isn't a scam here? It just begins with mobile carriers (apartment leases - deposit money kept as "cleaning fee", 1 month key money/gift money, renewal lease thank you money, etc).

Even if the monthly payments for the device ended after 24 months - I have offered to pay the entire cost of the phone on day one, and not one carrier has accepted. They look ghostfaced at the notion of getting all their money at once rather then a little at a time.

Also, when I signed a new customer contract with AU and bought an iPhone 6s, it was done thru Yamada Denki. After 2 days, noticed there were spots on the physical screen (discoloration, blotches). After having no less than 6 swap outs - 1 from Yamada, 1 from AU store, and 4 from Apple - I never had a phone in my possession for more than 1-2 days in the first month.

Of course when the first monthy bill arrives - payment for phone and mobile plan - I call AU to inform them I'm not paying it because this month of "service" and iPhone was spent going back and forth to Yamada Denki, AU and Apple stores to continually exchanging the phone, which everyone could agree there were multiple issues with their screens (to which an email to Tim Cook got me a phone call, and subsequent refund of the iPhone price). AU manager tells me it's not their fault the iPhones were all defective, and I still must pay for the service, even if never had a phone to use the service with.

I cancelled the contract the same day, never paid, told them to sue me.

0 ( +2 / -2 )

This is why you don't allow price-fixing by all the companies at the same time, and allow them to change the system the way they did after losing the fight to prevent the unlocking of phones. Once that was done, the three companies got together and decided on how much they would charge people for invalidating contracts. Now, they are making four year payment plans on models built to last two years or less, with newer models coming out the following year. So, if you break contract after only one year the minimum you would need to pay is approximately 30,000, not taking into account all the other costs of making a new contract, going into a new payment plan if you get a new model, and needless to say, the remaining balance on the old model, which is marked up considerably from the actual unit cost.

2 ( +2 / -0 )

It's a rip off in Japan, the US is so much cheaper and faster!

0 ( +2 / -2 )

@Saba - yeah. I remember having to buy the line for my first phone for several "man" yen. I was shocked! When I had to buy them for my company my accountant indicated they are treated as "assets" on the balance sheet and not counted as a cost. or as expense against revenue. Wild stuff.

I always found NTT arrogant and will never use them for anything unless absolutely necessary or unless it completely benefits me in some extraordinary way.

I think changes are coming though!!!! in a good way and thus the companies are trying to get the 4 year contracts now.

1 ( +1 / -0 )

Got my phone at Apple. Have a 1-year contract. 6 GB. Under ¥2,000. Of course it means you need to buy your phone up-front.

1 ( +1 / -0 )

It’s a 100% obvious to anyone from outside of Japan that the mobile market here is as inflexible as steel girder and ca complete rip off from start to finish. They have tied up the Japanese market and the Japanese fair trade commission hasn’t even scratched the surface. Not sure they will make any headway with this as the big the telecom companies here will have the current government deep in their collective pockets. As usually it’s the Japanese folk who bare the brunt of it. I have been here for nearly 3 years and I do not use or have a Japanese phone contract. I simply rent a portable WiFi service and use my phone with a foreign issued SIM card to allow chat or free call apps. Sorted at half the price and I have the freedom to terminate at the end of every month.

2 ( +2 / -0 )

I explained to them that after 24 months my phone is paid for and the installment should be deducted from my monthly bill. They told me that it is ‘ ‘normal’ that your payment doesn’t change even though you have paid for your device

100% same experience here (also SoftBank). 3 months after my 2 years ended I was still being hit with 10,000/month bills despite never making phone calls (100% data usage on my part). Was told it becomes a fixed cost when the contract is signed, even though that “fixed cost” is to pay for the handset. Absolute scam.

Biggest moron of all though: me. After hearing all this, I walked out with a new iPhone 8+ and same monthly phone bill hahahaha

1 ( +1 / -0 )

During the month of the contract end you have to inform the provider that you won't renew the two year contract then no longer charged for the phone and just continue as before. If you don't inform then the contract renewal is automatic and you will still pay the same charges.

Feb 2017 we told AU we would end the contract. Continued until September 2017 and then updated the phone and made a new two year contract. We were also being charged ¥1000 for a video pass and their care cover but we already had AppleCare so I cancelled those too. Before we paid more like ¥10,000 and now about ¥7,000 for an iPhone 7 Plus/Unlimited calls/1GB DATA (extra DATA @ ¥1,000/GB)

3 ( +3 / -0 )

It seems like a lot of you folks are not familiar with all of the alternatives to NTT/Docomo, KDDI/au, and SoftBank.

There are a ton of MVNO's like iijmio, Mineo, UQ, Y!mobile, and many others, that use the Docomo and au networks. (Y! uses Softbank's)

We use iijmio, currently. But, we're thinking of switching to Mineo, as we use eoNet for our home internet, TV, and phone, and there may be a further bundle discount. We'll see. It's not urgent right now.

No need to be tethered to the big three

1 ( +1 / -0 )

Four years?? Must be particular to Japan perhaps. Most of our plans are either 12 or 24 months, I pay about $50 a month on top of $40 plan and will own the phone after 2 years. Option is also there to pay it out anytime I want...

0 ( +0 / -0 )

I just went and got myself a Mi A1 for 25000 yen,the other day and I'm happy as Larry. I'm using the Mineo plan and though I enjoyed having an iPhone the rip off cost factor made it not worth it anymore.

0 ( +0 / -0 )

I always found incredibly expensives phone subscritpion prices in Japan, especially for a country with population density so high.

And why use iphones...

Happy to get honest price in other countries, where all is included and able to call Japan for "free" from over 10 years ago while it is not for my Japanese family.

1 ( +1 / -0 )

I stopped using Docomo/Au/Softbank since about 5 years ago. I switched to kakuyasushim like IIJMIO. I bought a used iphone for 20,000yen from yahoo auction. my monthly bill is about 1900yen per month. they give me 3GB/month which is enough for my usage. since its using docomo line, I found no difference from Docomo when it comes to signal power. saves me a lot of money.

1 ( +1 / -0 )

ShinCebu

I stopped using Docomo/Au/Softbank since about 5 years ago. I switched to kakuyasushim

But you can't use it for the prime purpose of the phone, unlimited calls? Most people need to be able to make calls anytime anywhere for any length of call.

I's not only about the cost but also the quality of service. My brother in New York is always complaining about the dead zones when he can't get a line. The 4G is slow compared to here.

2 ( +2 / -0 )

I pay Y1250 per month for my wife's phone with Rakuten. The data service is slow, but unlimited. Calls cost a lot, but she mainly uses it for e-mail. You can pay a bit more for unlimited calls. I always pay for the phone up front: no debts for me.

0 ( +0 / -0 )

The high price of calling in Japan is pure exploitation. There is absolutely no reason that it needs to be so expensive.

As zichi said, if you make enough long calls, it can be cheaper to go with a big carrier.

For me, it's cheaper per minute to use Skype-to-phone or Google Voice to connect from Japan, through the U.S., and back to Japan, than it is to use even the low-cost MVNO carriers. But, my family members, understandably, cannot deal with the hassle.

0 ( +0 / -0 )

The landline fees in Japan were even more of a scam yet I don't recall any outcry at all ...

0 ( +0 / -0 )

except for buying a landline just can also be sold the price per three minute call is the same as other countries. Telephone boxes are clean free from the smell of urine and work unlike in many other countries.

1 ( +1 / -0 )

@Sam Whitte

Speaking from experience. They won't sue you but your name will just be on a blacklist if you don't pay up. You wont be able to get a phone contract on any network on your name until you get that resolved. Just sayin.

0 ( +0 / -0 )

Apple care ends after 2 years (and cant be renewed through AU).

-1 ( +0 / -1 )

As to running costs of a phone, it may be better to simply switch back to plain old PHS in Japan, and simply use a PC for reading mails, etc. The new iPhones need a minimum f 1GB data usage per month, and most of that is for their System tasks - let alone your browsing, etc.

-1 ( +0 / -1 )

All AppleCare end after two years and has nothing to do with AU. New device new AppleCare. AU also has its own care.

1 ( +1 / -0 )

The new iPhones need a minimum f 1GB data usage per month, and most of that is for their System tasks - let alone your browsing, etc.

Not correct. My wife's iPhone 7 Plus uses less than 500MB of DATA per month. You can connect to AU wifi networks and at home she connects to our home internet. But combined unlimited calls and IGB DATA is ¥4.500/month. The total of ¥4,500 is now less than what we use to pay to NTT.

Video is the main user of large DATA use. My wife loves her iPhone.

1 ( +1 / -0 )

Some people like their Phone brands as much as their favourite Political party or Football team and will defend them to the death.

-1 ( +0 / -1 )

Free yourself and go sim free! I switched to DMM.com and my phone bill went from 13,000 a month to 3,000 a month, with more data. Jump ship while you can and simplify your life.

0 ( +0 / -0 )

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