Rakuten Inc. said Wednesday it has started offering unlimited data services using ultrafast 5G networks for 2,980 yen ($28) per month, less than half the fees charged by other major wireless carriers in Japan.
The move follows Prime Minister Yoshihide Suga's repeated requests for mobile phone carriers to substantially cut fees, which are said to be high compared with other countries. Rakuten's charges could intensify the price battle among its bigger rivals.
"We offer epoch-making charges which are 70 percent lower than those of other wireless carriers," Rakuten Chairman and CEO Hiroshi Mikitani said in an online press conference.
However, Rakuten's low-priced 5G service is currently available only in limited areas in six prefectures including Tokyo, Osaka and Hokkaido. Customers must also have handsets operable on 5G networks.
Rakuten's mobile phone unit said it plans to expand its own 5G networks across all 47 prefectures in Japan by March.
In Japan, major wireless carriers NTT Docomo Inc., KDDI Corp. and SoftBank Corp. currently offer similar 5G data service plans for between 7,000 yen and 8,000 yen per month.
Rakuten's mobile phone unit was able to drastically lower fees through cost-cutting efforts in building base stations. Its rivals are spending several hundred billion yen annually to build 5G networks across the country.
Ahead of Rakuten's move, NTT Docomo, Japan's biggest wireless carrier by subscribers, said Tuesday it will become a wholly owned unit of Nippon Telegraph and Telephone Corp. through a 4.25 trillion yen tender offer, the largest ever in Japan, in a bid to speed up provision of 5G networks and create a more effective management team.
"We don't comment on other carriers' moves, but we believe we can get support from more subscribers with this drastic price plan," said Rakuten Mobile Inc. President Yoshihisa Yamada.
In April, Rakuten Mobile, a new market entrant, launched a full-scale mobile phone service using 4G networks with a unique single fee plan that also costs 2,980 yen per month for unlimited calls and data services.
But the low-priced plan applies only in some urban areas including Tokyo, Nagoya and Osaka where the company established its own networks, failing to break up the oligopoly of the three major wireless carriers.
Rakuten Mobile had originally planned to start its 5G services in June but postponed the launch due to the spread of the novel coronavirus.
The e-commerce giant first entered the market in October 2014 as a virtual mobile network operator, using other mobile phone operators' networks.