KDDI: No Plan to Increase Subsidies

KDDI Corp., the second-biggest cell- phone company in Japan’s $71 billion industry, plans to add new subscribers without having to pay more incentives to retailers like rivals NTT DoCoMo Inc. and Vodafone K.K., “We’ve no plans to pay more subsidies per handset to add users,” President Tadashi Onodera said in a Nov. 25 interview. “We don’t see a need in giving bigger discounts on handsets if our customers are satisfied with our services.” Japanese wireless operators pay commissions to retailers for each handset sold to encourage sales, the phones are sold below manufacturing costs to consumers as carriers make their money from monthly fees.  

Tokyo-based KDDI, which had about 27 percent share of Japanese mobile phone subscribers at the end of October, pays about 38,000 yen to retailers for every handset sold, the company has said. DoCoMo on Oct. 28 raised its forecast for commission paid to retailers per handset by 1,000 yen, or 2.9 percent, to 35,000 yen this business year.

Vodafone K.K., which lost customers in the six months ended June 30, raised commissions paid to retailers and offered fixed- charge calls to keep subscribers from switching to rivals’ services. The wholly owned unit of Newbury, England-based Vodafone Group, doesn’t provide figures.

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