JIN-176 -- DoCoMo's New Policy Has Foreigners Fuming

J@pan Inc Magazine Presents:
T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business and Technology News

Issue No. 176
Wednesday, April 10, 2002


++ Viewpoint: DoCoMo's New Policy Has Foreigners Fuming

++ Noteworthy News
- KDDI, SK Telecom to Offer Roaming Service before World Cup
- Wireless LAN Provider Turns to Government in Impasse with JR East
- Mizuho's Messy Start Angers Government

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- Ma Xiaohu, Morrison & Foerster LLP(Hong Kong Office)

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++ VIEWPOINT: DoCoMo's New Policy Has Foreigners Fuming

Starting this month, if you're a foreigner in Japan and you want an
NTT DoCoMo cellphone, you have to pay for it via an automatic
withdrawal from your bank account or put up a deposit of 30,000 yen.
DoCoMo's Japanese customers can opt to pay at the local convenience
store, but foreigners who don't want DoCoMo reaching into their bank
account will have to pay the deposit, a DoCoMo official told J@pan
Inc. The company doesn't accept any credit card payments.

But some foreigners say even that option -- using automatic
withdrawal or putting up a deposit -- hasn't been made clear by
vendors. An angry J@pan Inc reader who goes by the handle 'New KDDI
Customer' related this episode to us: "After waiting for an hour to
have my phone set up, I was told that as of April 1, DoCoMo has
changed its policy to exclude foreign residents from the option of
convenience store payments. The only option now open to people like
me is to surrender their bank account information and allow DoCoMo to
withdraw automatically. It appears that foreigners do not enjoy the
same level of trust as Japanese in DoCoMo's eyes. I promptly got my
money back."

New KDDI Customer is right. Foreigners do not enjoy the same level of
trust, and that is because too many of them have been skipping out on
their bills. "There have been a lot of cases of foreign customers
leaving the country without paying their bills," says Mariko Hanaoka
of DoCoMo's international public relations division. She points out
that foreign-born permanent residents in Japan aren't affected by the
policy change -- only those who are on a limited-stay visa.

Last July, DoCoMo started making US military personnel plunk down a
50,000 yen deposit on new phones because of the problem of soldiers
skipping out on their bills. But while that policy has helped to curb
the problem with military personnel here, DoCoMo says, too many
civilians have also been saying sayonara without paying their
cellphone bills.

Hanaoka says DoCoMo doesn't know exactly how much deadbeat foreign
accounts cost the company, but last summer Stars & Stripes newspaper
cited an anonymous source who estimated military people skipping out
on cellphone accounts cost DoCoMo 3 million yen a month.

While there is no excuse for not paying your bills before you leave,
is DoCoMo right to paint all foreigners with the same brush? Many
people say the policy is discriminatory. "DoCoMo seems to be living
in the past, when discriminating against foreigners was commonplace,"
says New KDDI Customer. "Perhaps success breeds arrogance."

Big bureaucratic companies like DoCoMo often can't maneuver
skillfully through these sorts of problems. DoCoMo doesn't accept
credit card payments, but what if it did just for foreigners? Or what
if it made everybody pay a deposit or use the automatic withdrawal
payment method? The new policy is a clunker. J-Phone and KDDI can
expect to see more foreign clients coming their way. They both accept
credit cards -- even from foreigners.

-- Bruce Rutledge

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** KDDI, SK Telecom to Offer Roaming Service before World Cup

Extract: KDDI and South Korea's SK Telecom have agreed to share their
networks to allow people with the proper cellphones to use them in
either country. The service is expected to be launched this month,
ahead of the World Cup finals in late May to be co-hosted by the two

The World Cup is deepening ties between telecoms in both countries.
SK Telecom already entered into a roaming deal in November with NTT


** Wireless LAN Provider Turns to Government in Impasse with JR East

Extract: Wireless LAN service provider Mobile Internet Services last
week asked the Ministry of Public Management, Home Affairs, Posts and
Telecommunications to help it mediate the issue of installing
wireless LAN hot spots inside train stations owned by JR East.
Negotiations between MIS and JR East have been deadlocked as JR East
argues that hot spots will disturb their operations.

Nikkei Shimbun Newspaper (April, 7, 2002)
Mobile Internet Services http://www.miserv.net

"Wireless Hot Spots" April 2002 Issue

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** Mizuho's Messy Start Angers Government

Extract: It's been 10 days of miscalculations and misfirings for the
new Mizuho Bank so far this fiscal year. On Tuesday, Mizuho Holdings
president Terunobu Maeda compounded the headaches when he told a Diet
session that the bank's ATM mishaps caused "no trouble" for

Financial Services Agency chief Hakuo Yanagisawa said the government
may punish Mizuho for the 2.5 million or so ATM transaction mistakes
that affected hundreds of thousands of customers.

The new bank, which integrates the operations of Fuji Bank, Dai-Ichi
Kangyo Bank and the Industrial Bank of Japan, seems like it's in the
middle of a turf war. Tokyo's business districts are now dotted with
blue Mizuho signs, and some of the outlets are practically next to
each other, as at least one TV news show has pointed out. Why hasn't
the new bank come up with a more efficient plan for its ATMs? It's as
if there are three banks existing under one roof, and they're all
trying to retain as much power as possible under the new umbrella.


List of Mizuho ATMs (in Japanese)

SUBSCRIBERS: 5,357 as of April 10, 2002

Written by Bruce Rutledge (bruce@japaninc.com) and Sumie Kawakami
Edited by J Mark Lytle (mark@japaninc.com)


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