Friday, April 20, 2012

JCI lawsuit to recover excessive connection fees charge by NTT Docomo

This lawsuit is not about money. It's about NTT Docomo abiding by arbitration terms set by the Minister of Internal Affairs and Communications.
-JCI CEO Frank Seiji Sanda

Japan Communications, Inc. (JCI), the MVNO who provides the popular b-mobile SIM cards, has filed a lawsuit against NTT Docomo (DCM) in Tokyo District Court seeking to recover excessive connection charges.

A wholesale pricing structure for reselling service on DCM's network was set through government arbitration in June 2008. For the following two fiscal years, DCM charged JCI according to the terms of the contract. However, beginning from fiscal 2010, DCM began basing charges on alternate calculations.

The formula was in DCM's favor.

JCI immediately protested the change in billing but was told by DCM that service would be suspended if payments were not made in full. With no other choice, JCI has continued making payments and estimates excessive charges total ¥80 million, a relatively small sum. Therefore, the primary purpose of the suit is to prevent DCM from abusing its dominant position as the largest mobile network operator in Japan by unilaterally rewriting industry contracts.

Interestingly, DCM sees the fact that JCI paid the recalculated fees as evidence of agreement with the new formula. Obviously, if DCM is allowed to change the rules on a whim, the effects on MVNOs would be profound, and much of the progress we've seen as consumers in Japan over the last few years could be reversed.

In an interview with the Nikkei, Frank Seiji Sanda said that he had indicated to DCM the possibility of a lawsuit but doubts JCI was taken seriously. He went on to say that DCM likely had a "so sue us" attitude.


JCI press release

1 comment:

  1. It is this kind of abusive, monopolistic behavior that makes me want to not give docomo any more of my business. As far as I'm concerned, the best outcome for all involved would be for docomo to agree to settle, treat JCI fairly, and then I could renew my contract next month and get a Galaxy Note (or GS3) in good conscience.

    I'd go for JCI myself, but it seems they're still serving niche markets of low-data usage (under 2GB/mo.) or travellers who'll only use the service for a short time. (Please tell me if I'm mistaken here...)