Thursday, April 26, 2012

Docomo responds to JCI lawsuit

ITpro has published an interview with Furukawa kouji, NTT Docomo's (DCM) executive in charge of planning and coordination, regarding Japan Communications Inc's (JCI) recently-filed lawsuit alleging excessive connection charges. The gist of DCM's response is that JCI's understanding of the contract terms is lacking.

JCI is a Mobile Virtual Network Operator (MVNO) that provides service by purchasing wholesale access from a Mobile Network Operator (MNO), in this case DCM. JCI then resells this access in creative ways to its customers, the end users of b-mobile SIM cards, as well as other MVNOs such as BlueSIP. The premium above actual cost that Docomo charges JCI is regulated by the Ministry of Internal Affairs and Communications (MIC). The calculation of cost takes into account variation in construction, operation, business, and indirect costs. Therefore, the price charged to MVNOs will fluctuate.

While the actual details are not yet clear, the suit most like concerns what are best described (by @Durf) as "additional associated costs" (接続料直課コスト), such as those for personnel and infrastructure.

JCI started service with DCM in August 2008, but these additional associated costs were not billed to JCI prior to FY2010. According to Furukawa, this was because data was insufficient to allow proper calculation, and estimation of the additional costs would be fundamentally against the MVNO guidelines put forth by the MIC. It wasn't until the end of year reporting for fiscal 2009 that DCM was able to quantify the additional costs.

Even after billing JCI for the additional costs, Furukawa claims that DCM was been unable to recover the full cost of providing access to MVNOs, losing 35 million yen (~ $350,000US) on MVNO operations in FY2010.

How, exactly, Docomo is calculating these "costs" will certainly be the central issue in the upcoming proceedings.

1 comment:

  1. I know is not related but , do you know about this virtual operator??