When it comes to buying the new cell phone model here in Japan, I always got frustrated at their pricing scheme something like:
- 24,000yen($200) if you are changing from the existing model with the same number within the same carrier (e.g., docomo).
- 12,000yen($100), or sometimes even 0yen, if you are applying for the new number.
The price differential exists: the loyal customers like me who have been with the same mobile carrier with the same number get the price more and those applying for the new number get less. This is ridiculous, since the cost of manufacturing and delivery of the equipment should be the same. Yet my guess is a large portion of loyal customers now tend to compromise on the premium only to keep the phone number same. This is how this price differential works now and that’s why I, for one among many, am waiting for the mobile number portability soon to be operationally effective in Japan.
If/when the mobile number portability is introduced sometime this year as reported elsewhere (in Japanese or in English), it can possibly ignite the price war. Those who would have otherwise paid the premium might now have the option to switch to other carriers at promotional price without changing the phone number. I can imagine carriers would try to acquire the customers away from the competitor each other; at the same time, they will try to retain the existing customers at competitive offer.
As the result, the current price differential will disappear. The two different prices will converge to somewhere between zero and $240. While where it will converge is up to industry wise coordination, there is already a downward pressure now being further intensified by Softbank’s acquisition of Vodafone Japan.
Reference: International price comparison statistics (Japan=100) for cell phone rate and ADSL, the Japanese government published in November 17, 2005 (in Japanese):
JP=100 US UK FR DE
Cell Phone, 224 min 100 67 102 94 91
ADSL,always-on,3m, 100 116 168 162 116
Technorati Tags: mobile Japan Softbank Vodafone Number Portability
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