Home   >   Money   >   How do major Japanese phone carriers make money from you?

How do major Japanese phone carriers make money from you?

By on September 13, 2015

The answer is by selling only ‘Very expensive’ and ‘Too Expensive’ mobile phone plans with nothing in-between.

And to ensure that nothing gets in the way of their bottom line, they get you locked up on a two-year contract. This means that even if they run future campaigns within the period, you will not be able to join.  So you are stuck on their plan. Whether you opt out of the plan before the 2-year period expires or purchase the device separately, you end up paying more.

There’s no denying that owning a smartphone can be very convenient. But is it worth the money all these major carriers in Japan are charging?  I guess NOT –  unless, you have the money to burn.

When you want a shiny all-new top-of-the-line device, going to a major carrier seems to be the usual route for the misinformed. But the wolves in sheep’s clothing  have you all figured out. Even when campaigns sound cheap because of subsidized amounts on the device, the overall price for signing up could come to more than double the price of the device at the end of the 2-year period.

To prove a point, I posed as a buyer at three major carriers in town and asked each for the ‘cheapest’ iPhone 6s, 16 gb plan under a new contract (shinki keiyaku 新規契約).  Here’s what they quoted me:


AU

Device only if you pay in cash  ¥84,000

Subsidized amount if you sign up for 24 months  (¥68,160)

Cheapest LTE data plan
without Apple Care/Upgrade  program     ¥7,644 a month for 24 months

Total cost after 24 months    ¥183,456

Softbank

Device only if you pay in cash ¥93,600

Subsidized amount if you sign up for 24 months: (¥15,552)

Cheapest LTE data plan (White Plan free calls 1pm – 9 pm) ¥5,966 a month

Total cost after 24 months  ¥143,184

NTT docomo

Device only if you pay in cash  ¥ 93,312
Subsidized amount if you sign up for 24 months (¥ 25,920)
(subsidized amount varies according to NTT docomo shop)

Cheapest unlimited call plan ( 2 gb data) ¥6,500 a month

Total cost after 24 months ¥156,000
(But with NTT, you have the choice to do unlimited ‘calls only’ for ¥2,700 a month)

Major carriers will have you believe that you get a better discount by shitadori or trade-in plans. Don’t fall for this because the resale value of premium devices like iPhone and the latest Samsung Galaxy S6 is much higher than what carriers are willing to pay you. You are better off selling your old device some place else like Facebook Garage Sale or Craiglist.

How you can avoid the 2-year lock-up term and use a smartphone

The way around it is to use MVNOs.  It’s not a pay-as-you-go Sim plan that works in other countries. Here in Japan, you still have to sign a contract.  But it’s the closest thing to a bargain. To do this, you should have a sim-free smartphone which you can buy from providers or separately, and then choose a plan based on your needs.  Buying an unlocked iPhone and paying it upfront may hurt in the beginning but over the course of two years (under an MVNO plan), it will save you what major carriers will have profited from you.

If you already have a Sim-free or unlocked iPhones and want to use MVNO sim plan, DO NOT UPDATE TO iOS9.

Apple has recently announced that it will be offering users of iPhone 4s, iPad 2 and iPod touch or later, update to iOS 9  free of charge.  While it is a nice perk for iOS 8 users, iOS 9 will not work with MVNO provider MINEO using the NTT DoCoMo line because it has scrapped APN (Apple Push Notification)feature.

However, there are a few things you should know if you decide to go for MVNO plan.

The lowest data speed you need is 75mbps if you want to have a maximum reception similar to that of  major carriers . If you watch YouTube frequently, the length of use depends on your GB size. To give you an idea, here’s a guide:
1GB limits you to 4 hours’ video play a month or roughly 8 minutes a day
2GB limits you to 8 hours’ video play a month or 16 minutes/day
3GB is 12.5 hours a month or 25 minutes a day
5 GB 21 hours a month or 31 minutes a day

The following MVNOs provide various agreeable SIM plans that rival that of major carriers’.

U–mobile ¥680-¥900 a month (150 mbps speed) 1 GB – 3 GB
(compatible with iPhone 6 and android )
http://umobile.jp/

DMM Mobile ¥850 a month (150 mbps speed) 3 GB
¥770 a month )150 mbps speed) 2 GB
(compatible with android and iPhone 6)
http://mvno.dmm.com/

IIJ     ¥900 a month (150 mbps) 3 GB
https://www.iijmio.jp/

BB Excite                      ¥770 a month (150 mbps) 2 GB
http://bb.excite.co.jp/

IIJ                                     ¥900 a month (150 mbps) 3 GB
https://www.iijmio.jp/

Rakuten Mobile          ¥900 a month (150 mbps) 3 GB
http://mobile.rakuten.co.jp/

Big Globe                         ¥900 a month (150 mbps) 3 GB
http://join.biglobe.ne.jp/mobile/sim/

NifMo mobile                    ¥900 a month (150 mbps) 3 GB
http://nifmo.nifty.com/

About Tim Furukawa