Softbank to Abolish 2-Year Binding Mobile Contracts


Tokyo, Sept. 6 (Jiji Press)--Softbank Corp. <9434> plans to abolish its practice of offering discounts in mobile phone communications fees on condition that users not switch to other carriers during two years, informed sources said Thursday.

The Japanese company also plans to stop imposing penalty charges on subscribers terminating their contracts during the two-year period, the sources said.

Softbank is expected to implement the changes in mid-September, becoming the first major Japanese mobile carrier to abolish the two-year binding contracts and the penalty charges for early contract terminations.

The company's move comes in response to new rules that will limit the amount of such penalty charges to 1,000 yen, starting on Oct. 1.

Using two-year binding contracts is a common practice in the Japanese mobile phone industry, requiring customers of major operators to pay 9,500 yen if they terminate their contracts in periods other than the three months from the last month of the two-year term.

[Copyright The Jiji Press, Ltd.]

Jiji Press