2024-02-10 00:00:00
The guidelines of the Telecommunications Business Law were revised on December 27, 2023, and the upper limit and conditions for device discounts changed. For devices costing more than 80,000 yen, the discount amount is now up to 40,000 yen excluding tax, and discounts for individual devices that are not tied to a line contract are also included in this discount. The four MNOs (Mobile Network Operators) subject to these changes in guidelines were forced to revise the prices of their devices. There were even some devices whose real prices had increased significantly.
On the other hand, some carriers introduced new device purchase programs to coincide with the first day the new guidelines went into effect. It’s Softbank. The company launched “New Tokusuru Support (Value)” on December 27th. The existing “New Tokusuru Support” has been renamed to “New Tokusuru Support (Standard),” while applying value to some models. The unique feature of this system is that it keeps the real price down by replacing it every year. We asked Masamichi Goji, General Manager of SoftBank’s Mobile Business Promotion Division, regarding the company’s aim in launching new and valuable support (value) as quickly as possible.
SoftBank introduced a new Tokusuru Support (Value) on December 27, 2023.The fact that some models actually cost 12 yen in a year attracted attention.
Preparation for the new valuable support (value) introduced in conjunction with the guideline revision began one year in advance.
New Tokusuru Support (Value) is a program that allows you to lower the actual price by trading in your device following one year. At the beginning, devices such as the Pixel 8 (128GB) and Xiaomi 13T Pro were priced at “effectively 12 yen” in MNP due to this mechanism (currently, the price has been revised). With the revision of the guidelines, it was expected that it would be difficult to come up with a real price that was close to free, but the introduction of a system that reduces the burden by shortening the period until trade-in has attracted attention.
The popular Pixel 8 has lowered its real price from 24 yen to 12 yen with new value support. Even though it seemed inevitable that prices would go up, the company apparently managed to avoid it through some ingenuity.However, the price has now been lowered and it will return to 24 yen in two years.
The existing New Tokusuru Support system exempts 24 payments out of 48 payments when you trade in your device. By setting the first 24 payments at a low price, the lowest price was actually 24 yen. However, according to the guidelines, any amount that exceeds the general market price for second-hand items is considered a “profit” to users. When new guidelines are applied that include a maximum discount of 40,000 yen on a single device, some devices that had a lower real price will exceed that amount.
Excerpt from current guidelines.It is also stated that some device purchase programs are considered to be a provision of benefits.
What we came up with was a new value support system. Mr. Goji said, “When I checked the latest business law (guidelines), I found out that the value of the trade-in price of the device will be linked to a large extent.Until now, the device program was a two-year cycle of 48 payments. “However, by taking advantage of this cycle, we can increase the value of our customers’ devices.”
For example, let’s say you originally had a device that cost 100,000 yen. Let’s say the purchase price of a used car was 40,000 yen. If Softbank were to take over the service two years later for 90,000 yen, the profit provided to users would be 50,000 yen. Under the current guidelines, this would be considered an excessive discount and would be subject to guidance. On the other hand, the purchase price of a used device generally increases the closer it is to the release date of the device. Assuming that the price was 60,000 yen, the profit given to the user would be 30,000 yen even if the item was taken back at the same price of 90,000 yen.
Softbank’s Mr. Goji revealed that he was preparing new support (value) in line with the revised guidelines.
The actual price for both is the same 10,000 yen, but the period is different. While the previous system was 10,000 yen for 2 years, the new value support will actually cost 10,000 yen for 1 year. The theory is that although the period during which users can use the lowest price will be shorter, if they change models in a timely manner, they will be able to reduce their monthly costs. The shorter the cycle until trade-in, the easier it is to lower the real price.
SoftBank started considering a new support (value) system regarding a year ago. Interviews with carriers have begun in order to conduct a review three years following the Telecommunications Business Law was revised. At the “Working Group on Verification of Competition Rules” held in November 2022, SoftBank also submitted a proposal to set upper limits, including discounts on individual devices, in response to interviews with stakeholders. To prevent resale, restrictions were placed on standalone discounts, which suggests that the company judged that it would be difficult to continue with the system as it was at the time.
Materials that Softbank submitted to the Working Group on Verification of Competition Rules in November 2022.At the same time as calling for a review of regulations, the company also began considering the introduction of new value-added support.
The reason they started considering it early is because “there are a lot of changes that need to be made to the installment system and structure.” By preparing in advance when the direction of the revision was visible, rather than following the direction of the revision was confirmed, we were able to introduce services in a timely manner in line with the revision of the guidelines. Because they were able to maintain an impressive price of 12 yen, it is sometimes said that they exploited a loophole in the law, but Goji denies this view. He says, “I consulted (the Ministry of Internal Affairs and Communications) regarding what I was thinking regarding in advance and the purchase price.”
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