Could Japan's Cellphone Price Wars Migrate To US?

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NTT Docomo (DCM), which has over half of Japan’s $78 billion wireless market, is cutting its basic fees in half  Why? Smaller rivals KDDI and Softbank have brought down their charges. In a saturated market where consumers can keep their phone number as the move from carrier to carrier, price is the customer magnet.

Last month, Docomo lost almost 23,000 customers. Between them, KDDI and Softbank added almost 350,000. As the market leader, Docomo can’t let the shift go on for long.

The Japanese market may be mature now, but the US is getting there. The three largest cell carriers, Verizon Wireless, AT&T (T) and Sprint (S), have almost 180 million subscribers in country with 300 million people, many too young to have phones.

So far price cuts have not been a big part of how cell carriers pick up business. But, a smaller player like T-Mobile could decide that it is the only path to picking up market share. If so, customers could start switching more often and each one of these companies could take a hit on the bottom line.

Douglas A. McIntyre