June 25, 2014 / 10:50 AM / in 4 years

KDDI joins rivals with new prices to lift revenue per user

TOKYO (Reuters) - Japan’s No. 2 wireless carrier KDDI Corp on Wednesday unveiled flat-rate plans that are likely to raise monthly bills for most smartphone users using its KDDI au service, tracking similar moves by rivals trying to fend off pressure from free message applications such as Line.

KDDI au’s new monthly plan for smartphone users includes a voice service at 2,700 yen ($26.46) a month, matching prices of similar plans announced earlier this month by industry leader NTT DoCoMo and Softbank Corp.

Including data services and after discounts, KDDI au’s average revenue per user (ARPU) is currently around 4,150 yen per month, down from 5,800 yen five years ago. With the new plan, that is likely to rise as even the cheapest, flat-rate voice and data plan would cost around 6,500 yen.

All three providers have said they plan to eventually terminate their existing pricing plans, a move likely to prove unpopular with consumers, if not regulators.

Smartphone users are increasingly shifting to free messaging and calling applications such as WhatsApp and Line.

Line, owned by South Korea’s Naver Corp and particularly popular in Japan, allows users to text and call from smartphones, without being charged for a cell call.

A recent survey by Rakuten Research showed 61 percent of respondents didn’t want a 2,700 yen monthly voice plan.

The government has been criticizing carriers for giving consumers little choice over data plans, although they have held back from taking action so far.

Takashi Tanaka, KDDI’s chief executive, acknowledged the pricing may be considered too high.

“To be honest, it might be a bit expensive,” he told a news conference.

($1 = 102.05 Japanese yen)

Reporting by Teppei Kasai; Editing by Matt Driskill

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