May 25, 2021 Request for Implementation of Measures, including Guidance to Ensure the Appropriateness of Distributors’ Operations

The Ministry of Internal Affairs and Communications (MIC) has today requested NTT Docomo Inc. (headed by II Motoyuki, President and CEO), KDDI Corporation (headed by TAKAHASHI Makoto, President and CEO), SoftBank Corp. (headed by MIYAKAWA Junichi, President and CEO) and the National Association of Mobile-phone Distributors (headed by KANAJI Nobutaka, Director) to re-implement measures to ensure the appropriateness of the operations of mobile phone distributors. Such measures should include guidance to them as well.

There are approximately 8,000 nationwide stores (so-called carrier shops*) of major mobile phone operators. They are users’ most familiar contact points to handle mobile phone service contracts and after-sales services.

• *
  In fact, most of them are operated by distributors though the carrier shops nationwide include those directly managed by mobile phone operators.

Since mobile phone operators offer various rate plans and options, it is not easy for users to select a contract that suits their needs. For this reason, these career shops, where users can receive face-to-face explanations and support, play a key role.
However, according to MIC’s survey (published on April 26, 2021), the following results were mainly obtained.

• In a questionnaire for carrier shop attendants, more than 40% of the respondents answered that they had solicited a higher rate plan without carefully checking users’ needs.
• More than 40% of them pointed out the business goals of mobile phone operators as a factor in such solicitation.
• In mystery shopping, MIC confirmed that many distributors refused to sell terminals contrary to the purpose of the discipline, based on Article 27-3 of the Telecommunications Business Act (Act No. 86 of 1984). Such inappropriate acts at carrier shops may significantly hinder the protection of user interests and the promotion of fair competition.

For this reason, MIC has today requested NTT Docomo Inc., KDDI Corporation, and SoftBank Corp. to reinforce measures, including guidance, to prevent such acts from being performed by their respective distributors. At the same time, MIC has requested the National Association of Mobile-phone Distributors to inform the member companies of the request.

The relationship between mobile phone operators and distributors is also under study by the Study Group on Verification of Consumer Protection Rules of Telecommunications Services (chaired by NIIMI Ikufumi, Professor Emeritus at Meiji University) and the Working Group (WG) on Verification of Competition Rules (Chief investigator: NIIMI Ikufumi, Professor Emeritus at Meiji University) under the Meeting for Telecommunications Market Validation. Considering their conclusions, MIC will work with the Japan Fair Trade Commission and the Consumer Affairs Agency to take necessary measures to protect user interests and promote fair competition in the mobile market.