Will prepaid phones pay the price for allegedly rising crime rates in Japan? NTT DoCoMo president Masao Nakamura spoke of discontinuing prepaid phone services at a recent press conference and others are calling for an outright ban. Japan’s close (some would say too close) private/public-sector interaction seemed to shadow his statement that the company needed to act considering the growing number of fraud cases using prepaid handsets. It’s only coincidence, we’re sure, that one of DoCoMo’s foreign competitors stands to lose big from shutting down prepaid. And last week, a European business organization pointed out just how wacky a ban would be.
Nakamura said the company would ‘talk’ with other telecom operators about ending prepaid services. NTT DoCoMo only has around 88,000 prepaid handsets at this time; a negligible number in terms of Big D’s overall revenues.
But a ban would hit Vodafone K.K. hard.
The company has about 1.5 million prepaid handset users ・over fifty percent of the total prepaid market. With Softbank’s acquisition of Cable and Wireless IDC’s Japan unit, Vodafone K.K. has become the only foreign carrier currently in the Japanese market.
Politicians as well as the media began making a vocal case for doing away with pre-paid service after their use in several high profile fraud cases last year.
Hajime Yosano, a powerful man within Prime Minister Koizumi’s leading LDP party and Chairman of the LDP’s Policy Research Council has been vocal in calling for a ban yet most of the debate seemed to be taking place on the editorial pages of various news dailies and afternoon talk shows ・both for and against.
The situation took a more serious turn when Yosano proposed in late October that the government draft and table a law banning prepaid handsets. The move took many observers by surprise. “We have been very committed to cooperating with the Ministries of Internal Affairs and Communications,” says Vodafone K.K. public affairs spokesperson Matthew Nicholson. “We readily complied with government requests for stricter enforcement of identity checks for prepaid phone purchase.”
Critics have pointed out that despite stricter enforcement prepaid handsets can still be found for sale on Internet websites.
Japan’s Ministry of Internal Affairs at least has sounded a note of caution stating that there is no such ban in any other country.
In Europe, around 60 percent of phones are prepaid handsets. That figure rises to approximately 70 percent in England and to 90 percent in Italy.
In a presentation to the Japan Investment Council, Richard Collasse, Chairman of the European Business Community in Japan, expressed his group’s concern over moves to ban prepaid phones.
He noted in his 15 November address that “Certain members of the LDP have suggested banning pre-paid cell phones in response to the rise in telephone fraud.”
This is a gross overreaction, he added: “No other country has banned pre-paid phones. The Internet is used for three times as much fraud crime as pre-paid phones, but nobody is suggesting we ban the Internet!”
The European Business Community had earlier expressed their concern over the prepaid situation in the EBC’s 2004 report on Japan’s business environment.
Says Nicholson, “Vodafone is strongly committed to prepaid phones in the Japanese market. It is a convenient payment option and can give users who need it effective control over their expenditures;” Which is what the matter comes down to.
Does extending access to a larger number of people and providing social inclusion for those who perhaps might not otherwise have access to phone service (for a contract, you have to have a bank account, an address at which to receive the bill, etc.) outweigh the negative effect of the small minority that chooses to use prepaid phones with criminal intent?
Europe has overwhelmingly chosen the path of greater access. This winter we will see which road Japan decides to follow. And whether the single, foreign-owned carrier has to choke down the loss.