Rakuten launches cut-price 5G phone plan

Rakuten Inc. launched an unlimited data plan for its 5G mobile phone service Sept. 30 that costs less than half the price of those of three major companies, including NTT Docomo, Inc. Rakuten’s new plan, which utilizes 5G next-generation wireless network technology, costs ¥2,980 per month, excluding tax.

The move may increase the pressure on the three major companies, which have already entered the 5G market.

The 5G plan has a flat fee and it is the same price as the current standard 4G plan. However, customers will need to have a 5G-compatible mobile device.

The three major companies’ 5G plans are generally about ¥7,000-¥8,000 per month, which is about ¥ 500-¥ 1,000 more expensive than their 4G plans.

Rakuten said they are able to offer the new plan at a low price by cutting the costs for building mobile base stations.

However, Rakuten’s 5G coverage is limited in certain areas, such as in the

Tokyo metropolitan area, compared to the other three companies. Since Rakuten entered the market in earnest in April, there have been concerns regarding the quality of its services, including connectivity issues. The company initially planned to launch the 5G service in June but delayed the rollout for three months because of the coronavirus. The company needs to establish a more stable communications network to attract more customers.

Prime Minister Yoshihide Suga has expressed a strong desire for companies to lower mobile phone fees, citing the cost of mobile fees around the world.

“Lowering the cost by only about 10% would not be called reform,” Internal Affairs and Communications Minister Ryota Takeda said.

The government is putting increasing pressure on the companies to cut their prices.

With Rakuten’s new price point, the focus will likely be on how the other companies set their prices in the future for 5G services.