As I browsed the many Japanese news sites I frequent these past few days, I came across an interesting article on SIM Unlocking in Japan. To give some background, there are three main phone carriers in Japan: Softbank (formerly Vodafone Japan), NTT DoCoMo, and AU by KDDI. NTT DoCoMo is the mobile phone brand of the NTT Communications company—sort of like the Telstra of Japan. All three companies provide relatively similar mobile phone services at similar prices. Another thing all three carriers have in common is that they lock the devices to their network and will not provide unlocking of the device even if you ask them to. The Ministry of Internal Affairs and Communications have recently revealed plans that they want to make SIM Unlocking compulsory in Japan and this article discusses the issue a little more. Having just spent time in Japan, I was amazed that unlocking just was not something that was done.
In any case, here is my translation of the article with some of my own comments about it following on.
Original article: 総務省がSIMロック解除を義務化へ ── 各種割引制度はどうなる？
Ministry of Internal Affairs and Communications to make SIM unlocking compulsory —— What will happen to the various current discounts?
The Ministry of Internal Affairs and Communications (MIC) has revealed plans to make it compulsory for mobile carriers to provide SIM Unlocking by 2015. But what is SIM Unlocking? And, if it were to be made compulsory, what exactly would change?
Compulsory SIM Unlocking will curb enclosure of customers1 and generate a more active mobile phone market
The majority of mobile phones and smartphones sold in Japan are carrier-restricted using something called “SIM Locking.” To use the device, you are required to insert a SIM card with a unique ID number attached to it. SIM Locking, then, means that if you try and insert this SIM card into the device of another carrier, you won’t be able to use it.
In Japan, phone carriers purchase mobile devices from the manufacturer and then sell them on to their customers. At times, incentives are paid to agencies in order to lower the cost of these devices. However, to prevent customers from purchasing phones at a cheap price from one carrier and then taking it across to a different carrier, SIM Locking is utilised.
On June 30, at the “7th Working Group for Sustainability and Revision of Consumer Protection Rules” held by the MIC’s “Research Committee on Consumer Issues with ICT Services”, mobile phone carriers were drawn attention to their obligation to provide SIM Unlocking. There are three causes—related to the current state of the mobile phone communications market—attributed to this, outlined in the draft Interim Report: the current market only has three major players; the only fierce competition is the squabble over and enclosure of existing users; and there are strong hints of a coordinated oligopoly.
Meanwhile, it was also pointed out that the usefulness of these devices is markedly limited after the contract has ended, customers’ free choice is prohibited as they are unable to use a local SIM card when travelling overseas, and this compromises convenience. As it is necessary to purchase a new mobile device when switching to a different carrier, this pushes switching costs up. This is considered a primary factor that inhibits competition, as well as one of the causes of cash back campaigns that are used when attracting new customers.
And, while carriers do provide users with discounts to monthly call charges proportionate to the monthly handset instalments, as well as large cash back deals, not only does this put a strain on competition between carriers, it also impedes the ability of Mobile Virtual Network Operators (MVNO) 2 —that would struggle to provide cash backs in order to attract new customers—to obtain new customers and grow.
SIM Unlocking would make it possible to change carriers without purchasing a new phone
In fact, the Ministry of Internal Affairs and Communications had drawn up the “Guidelines for SIM Unlocking” back in June 2010 and had hoped that carriers would be proactive in providing SIM Unlocking; however, the effort made by carriers to do this was limited and as such, the bold move was made to make SIM Unlocking compulsory. Now, if a carrier refuses to provide SIM Unlocking, it is currently under consideration, that a business improvement order be able to be issued to a non-complying company, under the Telecommunications Business Act. This is merely a stage of the Interim Report; however, upon enactment of a concrete plan, it is expected to be carried out in 2015, also.
So, what benefits are there for the average user if SIM Unlocking is to be made compulsory? Firstly, at present, if a person wants to switch carriers, they also have to purchase a new phone to do so. With SIM Unlocking, consumers will be able to change carriers without having to purchase a new phone. Presently, there aren’t any significantly noticeable differences in plan prices or network quality between carriers; however, if the MIC’s aim of pure market competition—including MVNOs—goes accordingly, prices will decrease, and we should start to see benefits from changing carriers, alone. Also, users travelling overseas on business or for holidays will also be able to use local SIM cards in their SIM-unlocked phones.
A chance that various discounts will disappear; circumstances where you may not be so pleased about SIM Unlocking
However, you won’t necessarily be completely pleased with compulsory SIM Unlocking. For instance, discount systems like cheaper monthly call charges proportionate to the monthly handset instalments or large cash back deals are actually due to the fact that SIM Locking is in place. It should be no surprise that countries where unlocked handsets are the norm are the same countries that don’t have such discount systems in place; therefore, users in these countries must either pay for phones upfront or in monthly instalments. We also can’t deny the possibility that, in some instances, the total cost of purchasing the latest handset will become more expensive.
Given the various different plans Japanese mobile phone carriers have brought out to date, it is likely that even after SIM Unlocking is made compulsory, Japanese mobile phone carriers will develop different ways in order to enclose their customers. Just what exactly they will develop will depend on the carrier. One option may be to use this opportunity to move to an MVNO; however, we should first observe what each of the mobile carriers is going to do next.
1. This is a somewhat literal translation of the original article’s phrase 囲い込みの抑制 (kakoikomi no yokusei) where kakoikomi means “enclosure”. I considered other more natural sounding English phrases but considered this interesting. The connotations of the phrase make sense; however, in English we use the word “enclosure” in a more literal sense so you might be picturing these phone carriers herding their customers into cages to prevent them from changing carriers.
2. An MVNO is a mobile phone carrier that does not own any network infrastructure and instead pays money to a carrier that does own infrastructure to theirs to provide mobile phone services. In Japan, these are starting to gain popularity. One such example is B-Mobile—which uses the DoCoMo network. These MVNOs are generally cheaper than the main carriers but they are a no-frills service that purely provide data and calls and no extra media content that the main carriers are known to provide. An example in Australia would be something like Vaya Mobile who utilise the Optus Network to provide services to customers.
While by no means an overly technical piece, this definitely presented more challenges than my first post. The writing style of this article was more sophisticated and contained many expressions that did not have English equivalents. Given this, it was necessary to get my creative juices flowing to re-word these sentences whilst maintaining the author’s intended meaning. This is a problem I imagine I will frequently face when translating from Japanese to English so the more I practise, the better I’ll get.
Another difficulty was coming up with translations for the names of the working group and committee. I consulted the English version of the Ministry of Internal Affairs and Communications website; however, this site contained very limited information in general and certainly no information about this particular issue.
Similar to this, translating the name of the Act cited in the article, 電気通信事業法 (denki tsūshin jigyō hō) was something I was at first unsure how to go about. After some Google searching, I came across this site that contains English translations of many different Japanese Law Titles so this was a great help and may come in handy in the future should I do any Legal translation.