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TOKYO, April 24 For Japanese billionaire Masayoshi Son, who wants to build the world's largest mobile Internet company, criticism of his operations from regulators in his home market could not come at a worse time.
The feisty entrepreneur is lobbying sceptical Washington officials to let him buy a second U.S. mobile operator, saying he would help to break up a cozy U.S. wireless oligopoly.
Son says he is an outsider who stirred up a price battle that benefited consumers after he took over Vodafone's failing Japanese operation eight years ago.
So it must be galling to hear regulators in Tokyo chide his SoftBank Corp, along with NTT DoCoMo, Japan's mobile industry leader, and No.2 KDDI Corp, for lack of competition in the domestic smartphone market.
"You could say the mobile market is an oligopoly of the three big companies," Communications Minister Yoshitaka Shindo said at a regular news conference this month.
His ministry is preparing long-term proposals to bring lower prices and faster services, including fostering growth of mobile virtual network operators (MVNOs), cut-rate providers that lease network access from the big carriers.
The sniping will not help Son's plans to acquire T-Mobile US Inc.
He wants to combine the No. 4 U.S. mobile carrier with No. 3 Sprint Corp, which SoftBank bought last July for $21.6 billion. Together, he argues, they would have the heft to take on dominant carriers AT&T Inc and Verizon, which he derides as a complacent duopoly.
But top U.S. regulators, including Federal Communications Commission Chairman Tom Wheeler and U.S. antitrust chief William Baer, have pointed to T-Mobile's success since U.S. authorities in 2011 rejected a merger between AT&T and T-Mobile on the grounds that the market needed at least four major players to be competitive.
Not one to give up easily, Son has hired a former FCC chief counsel to help with Washington relations and started a public push for his case, in advertisements around the U.S. capital and presentations to stakeholders.
Son told an audience of industry officials at the U.S. Chamber of Commerce in Washington last month that he had brought a "price war" to Japan when he entered the mobile market.
"I'd like to bring that to the States," he said. "American consumers use less data traffic, but pay more."
YOUR OLIGOPOLY OR MINE?
These days in Japan, however, the rare new plans and services that pull smartphone prices lower are no longer tending to come from SoftBank.
It was DoCoMo that a year-and-a-half ago broke with the big carriers' standard practice of requiring smartphone users to pay for a minimum volume of 7 gigabytes of monthly data traffic - even though barely one-in-10 ever use that much. It offered a 3 GB service for 1,000 yen less than the standard plans' 5,700 yen ($55.56), which KDDI and SoftBank did not match.
Retailers such as supermarket operator Aeon Co Ltd and electronics chain BIC Camera Inc have also jumped into the market with cut-rate MVNO services over the past month.
"SoftBank used to be a competition driver," said a communications ministry official, who spoke on condition of anonymity. "But now it's completely spoiled by the three-company oligopoly."
In October 2006, when Son elbowed his way into the mobile phone business, he had already made a name for himself by bringing cut-throat price competition to Japanese fixed-line Internet services.
With his 1.75 trillion yen ($17 billion) Vodafone Japan purchase - at the time Japan's biggest non-financial acquisition - and a promise from Steve Jobs for exclusive Japanese rights to the iPhone, he steadily captured market share from rivals.
He introduced a cut-rate 980 yen-a-month ($9.55) plan, while pledging to match any rivals' price reduction within 24 hours.
Eight years later all three operators are enjoying strong profits, with SoftBank and KDDI setting records, and they have come under pressure to cut prices as the government tries to prod the economy into a sustainable recovery.
The communications ministry cites data suggesting Tokyo's smartphone rates are among the world's highest.
For 1.6 gigabytes (GB) a month - enough to view about 7.5 hours of streaming video or more than 10,000 home pages - only New York and Duesseldorf were more expensive, 2012 data from seven major cities shows. For light users at 500 megabytes (MB), Tokyo was most expensive.
The main reason is the 7 GB minimum in most smartphone plans, a legacy of unlimited data plans once standard with cheaper Internet-connected feature phones.
"It's like always being served a 7 kg (15 lb) steak whatever restaurant you go to," said Japan Communications Inc Executive Vice President Naohisa Fukuda, one of a small but growing number of Japanese MVNOs.
SoftBank's regulatory division head, Mitsunobu Yoshino, argues that these costs are offset by aggressive marketing campaigns, including cash rebates that often exceed the price of the smartphone.
"Even for existing customers we offer trade-ins and student discounts, and this doesn't show up in the communications ministry's data," he said.
These incentives weigh on Japanese carriers' average revenue per user, a standard industry measure which has been trending flat to slightly lower in recent years, while the top U.S. mobile carriers have seen steady rises.
Regulators are not convinced.
The aggressive marketing campaigns simply distort the market, they say, offering a windfall to a limited group of consumers willing and able to change carriers frequently, while making it more difficult for MVNOs to enter the market.
SoftBank's sensitivity towards the criticism at home was evident during a courtesy call by a company executive to the communications ministry this year, according to a person present at the meeting.
SoftBank and the ministry declined to comment on the meeting, but the source who was present said the executive told officials: "If the communications ministry goes around saying things like there's no competition in Japan's mobile phone market, people overseas may actually believe that." ($1 = 102.5700 Japanese Yen) (Additional reporting by Alina Selyukh in Washington; Writing by Edmund Klamann; Editing by Alex Richardson)
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* Spot gold may retest resistance at $1,254 per ounce - technicals * Gold on track for third straight weekly decline (Updates with quotes, prices) BENGALURU, June 23 Gold prices edged higher on Friday as the dollar softened and risk aversion due to geopolitical events buoyed the safe-haven appeal of the metal. "Risk aversion is on the rise, mainly due to what's happening in the Middle East and also the news about China cracking down on some loans made overseas last