Yes, iPhone Carrier Subsidies in Japan are Officially Dead: New Docomo Data Plans

The writing has been on the wall for over a year now, and sluggish iPhone XR sales only confirmed the fact, that iPhone carrier subsidies in Japan which have defined the industry since 2008, were dying. Today’s Docomo announcement unveiled new plans that discard all the complexity of previous plans like ‘FOMA’, ‘Xi’ and ‘docomo with’ all of which disappear on May 31, with 2 simple choices:

  • Giga-Ho: ¥4,980 a month for 30GB
  • Giga-Lite: ¥1,980 a month for 1GB with other date tiers available, 3GB@3,980, 5GB@4,980, 7GB@5,980

Docomo customers can apply for the plans from the Docomo web site or a Docomo shop starting May 22, service starts June 1. There are many configurations and new options available, from home internet bundle discounts to new family data sharing. And it looks like tethering fees are gone. Depending on the configuration savings can be as large as 40% compared to previous plans.

At first glance customers will still need to do some homework via the online cost simulator (something that Japanese love to do), or visit the nearest Docomo shop to find the configuration that fits your needs while giving the best discount. This is just part 1 of the continuing saga of data plans without subsidies. At the end of the announcement Docomo said stay tuned for more. KDDI au and SoftBank should be announcing new plans soon, and we’ll get Docomo part 2 when the new iPhones come out this fall.

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Unlocking JP Carrier iPhone SIM Lock

All Japanese carriers offer free SIM Lock unlocking service 100 days after purchase or 100 days after a previous SIM Lock unlock of the same contract mobile number, which ever comes first. Day 1 iPhone XS users are just past the 100 day mark, I successfully unlocked my Docomo iPhone XS SIM today. You can do this at your local carrier store for ¥3,000 but it’s free when you do it online via My docomo, My SoftBank, My au. Have your iPhone IMEI number ready: go to Settings > General > About and scroll down to the IMEI number to copy it. Be sure to remove any spaces between number groups so it is one unbroken number string.

I don’t know about SoftBank or au. Docomo is a little sneaky because they hide the SIM Lock removal option in the iOS My docomo app. You can only access it from My docomo web site. The page and procedure is Japanese only but there is an outline of the procedure and conditions in English. Here are screenshots of the process in case you get stuck.

Copy the IMEI number (no spaces) here
Confirm the SIM Lock unlock item is checked> in the lower box click the blue URL for Terms and Conditions then check the blue box item directly below.
Confirm your email to receive confirmation
Confirm the iPhone and IMEI information and email address them click/tap the final button to process the SIM Lock unlock procedure.

NTT Docomo and SMBC bury the hatchet…maybe

It’s very strange that the JCB QUICPay network has gained the most benefit from the Apple Pay makeover of the Japanese contactless payments market instead of the Docomo iD network. Docomo invented the Osaifu-Keitai standard with Sony in 2004 and was the natural favorite, but iD has only treaded water while JCB has seen steady gains in QUICPay issue cards, customers and transactions.

Docomo iD problems boil down to bad blood between Docomo and Sumitomo Mitsui Banking Corporation (SMBC) who issue and manage Docomo d-CARDs and help run the iD payment network. Up until 2016 VISA d-CARD was king. Then something happened. Things got so bad between the 2 companies that Docomo removed all VISA branding from their website and Docomo stores strongly urge new customers to create a Mastercard d-CARD not a VISA d-CARD. VISA might seem like the target here but SMBC, the first Japanese bank to issue VISA back in 1968, are the real power behind the VISA throne in Japan, and the real target for Docomo ire.

VISA refusing to sign on directly with Apple Pay Japan or offer NFC switching that Mastercard, JCB and AMEX do is undoubtably a big friction point because it diminishes the iD brand and VISA d-CARD. VISA also half-heartedly pushing VISA Pay Wave again, with SMBC pulling, doesn’t help. Which makes the NTT Docomo/SMBC detente ‘let’s build a new future together’ announcement so interesting. Here are the 3 announcement points <with comments>

  • First of all Docomo and SMBC agree to start all over again to rebuild the d-CARD business and develop new services. <Nice boilerplate stuff with no promises and no deadline for delivering anything>.
  • Sumitomo Mitsui Financial Group will buy back all outstanding shares of Sumitomo Mitsui Card Co. (34% of the company) from NTT Docomo by April 1, 2019. <Why does Docomo want out of the credit card business? Do they think that credit card industry pricing and fee structures are unsustainable in the face of ubiquitous contactless payments of all flavors, online banking and ever more competition? Do they think the credit card industry is going to have to live on far less and have to aggressively restructure? Or is it something else like getting out of the 2 year contract subsidizing business? Inquiring minds want to know.>
  • Docomo NTT and SMBC will work together to develop and deliver more cashless solutions and expand the iD network. <That sounds nice but what does it really mean? Is VISA finally joining the Apple Pay Japan party? Is Google Pay support coming on iD?>

Like all cold war detente agreements, the proof will be in the pudding.

iOS 11 Apple Pay NFC Switching in Action

It’s interesting being back in America, somehow I envisioned Apple Pay availability being the same as it is in Tokyo. It’s not, at least not in Salt Lake City. The payment terminal infrastructure is pretty creaky too. Those fancy Flight Holdings Incredist payment terminals would be a welcome sight.

It is fun using the iOS 11 Apple Pay NFC switching feature. My Docomo dCARD/Mastercard ‘just works’ for Apple Pay everywhere. How boring, as it should be. It would be nice if it worked that way for everybody everywhere too.

Docomo dCARD Mastercard is Global NFC

VISA Japan Shoots Itself in the Foot Refusing Apple Pay

What a difference a year of Apple Pay Japan makes.

I went to the local Docomo shop yesterday to help a friend move his au iPhone 6 to a Docomo iPhone 7. It took about an hour because he had to download au points to his au Wallet Prepaid card before switching the phone number to the Docomo SIM but all in all it was a smooth process.

The real eye-opener for me was that when he signed up for the Docomo dCard Mastercard appeared to be the only option. 2 years ago VISA and Mastercard dCards existed side by side. Not anymore. Docomo has gone all in with Mastercard branding. VISA is still available if you want it but is ‘not recommended’. The reason is Apple Pay.

It’s very simple. Docomo wants dCard to ‘just work’ on Apple Pay and on Docomo branded Android ‘Osaifu Keitai’ without limits both in Japan and abroad. VISA does not allow this. Mastercard does. I guess VISA thinks Docomo is dispensable even though Docomo pioneered feature phone contactless payments.

JCB has already seen healthy subscriber growth since Apple Pay launched in Japan simply because JCB, along with Mastercard is doing a better job taking care of Japanese customers. Instead of taking care of customers VISA seems more interested in playing market politics to sideline FeliCa payment networks in favor of EMV contactless.

Good luck with that.