TOKYO KDDI Corp said Tuesday it will introduce a new charge system for its au cell phone services in November, featuring lower call rates and higher handset prices. Even after the introduction of the new system, KDDI will keep its conventional charge system in place to give users freedom of choice, the sources said.
Conventionally, cell phone service providers have been paying expensive sales promotion subsidies to handset sales agents with the aim of bringing in new customers. The subsidies allow the agents to sell handsets at steep discounts, as low as one yen, while service providers make up for the discounts with higher call charges.
Because this charge system is disadvantageous to consumers who use the same handsets for a long time, however, the Ministry of Internal Affairs and Communications has been urging service providers to introduce new systems in fiscal 2008 at the latest.
KDDI plans to reduce its sales promotion subsidies paid to handset sales agents, a step expected to help eliminate excessively low-priced cell phones, the sources said. The company has yet to decide the margins of call rate cuts.
Among other mobile service providers, NTT DoCoMo Inc plans to introduce a new charge system similar to KDDI's, while Softbank Mobile Corp has already tackled the problem of one-yen mobile phones by starting to sell handsets on installments.










