Thursday, April 10, 2014

NTT Docomo to introduce price decrease, flat-rate voice, VoLTE from June?

There is no official statement from NTT Docomo about this. The story originated in the old fashioned print newspapers (as so many important stories do).

There are three particular facets to the rumored changes:
  • A flat rate voice calling plan that includes all mobile and landlines for ¥2,700
  • Total cost of LTE data and flat-rate voice of ¥5,900 (now it is about ¥8,000)
  • A shared family data plan of 10GB for ¥10,000.
The current voice plan for Docomo LTE (Xi) contracts gives unlimited calling to other Docomo subscribers for about ¥2,000 per month (Talk 24 + base fee with 2-year contract). The out of network cost is HIGH: ¥42/minute (billed in 30 second intervals). This is so high, that over the nearly 30 months that I've had a Docomo Xi contract, I've placed an out-of-network call exactly ZERO times. I'll find a phone booth or fire up my SIP client and route the call through my United States VoIP provider before I'll pay that price.

Effects throughout industry (if true)

Of course the KDDI and Softbank would introduce completing plans. This is not an attempt to bring in new customers to Docomo, but the opposite – slow the flow of existing ones out.

This would also likely be good news for MVNO users. A bug in the Nexus 5 prevented it from working with 3G contracts, which forced many users of low-priced b-mobile SIMs to switch to LTE plans. While the wholesale pricing of 3G contracts allows for the inclusion of "free" minutes, this isn't the case with the pricing on LTE contracts – all calls cost ¥42/minute.

What makes this most ironic is that even with an LTE contract, calls are routed over 3G anyway because...

Voice over LTE

All Japanese carriers are planning on introducing Voice over LTE (VoLTE). There hasn't yet been a lot of talk about this, though. When it does come, it is expected to result in less expensive voice plans. Tsuda Hiromu at Engadget JP raises the possibility that this pricing is in anticipation of VoLTE introduction.

When you stop and think about it, that makes the most sense.

It's hard to see Docomo doing this if calls are still routed over 3G. So I guess this means we could see VoLTE from Docomo in June. If this does indeed signal the introduction of VoLTE in Japan, it would mean that KDDI and Softbank would be limited on their ability to compete on voice price until they too introduce VoLTE. This in turn means we'll probably be seeing more dumb promotions and unsustainable cash back offers from them until they get up to speed technology wise.


  1. I wonder if overall voice use haven't perhaps dropped the past few years as people come to rely more on other ways to communicate. In that case this kind of price drop may be a way to make use of idle 3G capacity as much as anything else.

  2. That's a possibility, but voice has never been all that popular to begin with, so even if hangouts, line, etc. ate into that profit, how much revenue was generated by voice...

    Actually doesn't helmetti have a post on JMT showing just that?

  3. True enough. What I was thinking of was the switch to unlimited voice plans. People really prefer unlimited plans over metered ones, even when they know it will cost them more money.* If relative use of voice has dropped there's unused capacity. And one of the few ways to get that capacity to make money would be to up-sell people on an unlimited plan.

    Sure, they'd call a bit more than before, but that would use capacity already installed and paid for. You can bet that the price level is very carefully chosen so that the total amount spent on calling will be the same or more than before if most people switch, and the increase will be almost pure profit. And as you say, it'd slow the bleed to the smaller carriers. In the end they should all converge on the same number of customers of course.

    *It's a well-researched psychological effect; really a side effect of loss-aversion.

  4. 41/min? I would like to see the contract before believing that, standard is 21yen.

  5. LTE performance in our office, right next door to NTT akasaka, is ok at night, I get maybe 10Mbit/s.
    During the day, a single channel of ISDN would comfortably out-perform it.

    And they want to route voice over it? Why??

  6. I hope that you are either trolling or not a DCM LTE user.

  7. Don't know exactly what it costs; I never call enough to use up the 1000 yen per month of "free" calls. Certainly the effective rate is much lower for most people because of that.

  8. Xi does have a family discount where the calls to registered family members on Docomo is free. However for all other calls it is 21yen / 30 seconds which I guess will increase by around 3% now.

    On a separate note, I have been Rakuten Denwa for some time now which gives the same call service but half the price i.e. 10yen / 30 seconds plus tax.

    Not that I make a lot of calls, but whatever usage of 200-300 yen per month has been cut by half :-)

    While VOIP has the best cost performance, it can sometimes be unreliable to use over data network for some formal calls.

  9. Official statement has been released by Docomo as well

  10. Ah, you are right. free family calling is not an option for standard Xi, but it is an option for xi 2-year.

  11. oh, and regarding VoIP, you are absolutely right. Call quality and latency to Japanese phones is suspiciously bad and unreliable. For example, Android SIP client → US VoIP provider → POTS or mobile somewhere in Europe has acceptable quality. Latency may be noticeable, but it doesn't not prevent a comfortable conversation.

    However, Android SIP client → US VoIP provider → POTS or mobile somewhere in Japan is often very bad. Even calling directly from the US with VoIP into Japan is often very bad quality.

  12. Not trolling at all and seems like I was mistaken, it is listed as 21Yen / 30 seconds, that is where I made my mistake.
    I usually also signup for free calls inside the docomo network.

  13. I'm intrigued by this Docomo family calling plan. All I can find on their site is Xi kake-hodai which I don't want or some Foma family plan(unless that's the one that also applies to 2-year Xi? My Xi contract is 2 years). My gf has kake-hodai so she usually just calls me back but it would be handy if I could also call her for free by some other means.

    As for VoIP in Japan:

    A friend called me last week and then we switched to FaceTime audio because it was charging her. FaceTime audio is amazing compared to regular calling. No background noise, voices crystal clear, it felt like we were in a recording studio. She's with au or SB and we were both using mobile data.

    Unfortunately most people I know don't use FaceTime.

    I use Vonage for calling real phones because it's about 1-3Y/minute to landlines. I used Skype before but the quality was bad(and I often had mic problems which I'd find out after 5 mins waiting in the queue when calling HSBC!) and it cost more per call. Vonage is better but still not great.

    Viber's started doing it, too, and their rates are better than Vonage but I haven't tested the call quality. Maybe the issue is due to whatever point the call originates from within Japan?

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