KDDI to Cut Mobile Phone Contract Penalties to 1,000 Yen

Economy

Tokyo, Aug. 28 (Jiji Press)--Major Japanese mobile phone carrier KDDI Corp. <9433> said Wednesday it will start offering a new subscription plan on Sept. 13, slashing penalty charges for early termination of two-year contracts to 1,000 yen.

The new plan is designed to comply with new pricing rules that will take effect on Oct. 1.

KDDI, the operator of "au" mobile phone service, was the first major mobile phone carrier to announce a reduction of penalty charges, acting ahead of industry rivals, NTT Docomo Inc. <9437> and Softbank Corp. <9434>.

Following the enactment of the revised telecommunications business law, which requires mobile phone operators to separate communications fees and handset prices, KDDI announced plans in June to cut communication fees by up to 40 pct while setting early contract cancellation penalty charges at 9,500 yen.

The company decided later to reduce the penalties after the communications ministry drew up a new rule to cap penalty charges at 1,000 yen.

[Copyright The Jiji Press, Ltd.]

Jiji Press