Cutting the Contract: A Guide to Setting Up a SIM-Free Phone in Japan

I'm not a big fan of Japan's larger telecom companies. Prices seem grossly inflated, competition is almost non-existent and getting out of the contract once you are locked in is almost impossible.

However, things have been looking up recently.

In May 2015, a small but significant change was made to the telecoms law. As of that date, any phone bought on a contract in Japan could, at the customer's request, be unlocked after a period of six months. Suddenly, switching networks became even cheaper and easier. This has, in a relatively short space of time, lead to a boom in the MVNO sector in Japan.

The rise of MVNOs

A mobile virtual network operator, or MVNO, is basically a company that provides access to mobile networks but doesn't own its own network. In other words, it pays a larger provider for access to the network infrastructure and then negotiates its own contract with the customer. Given that MVNOs run with far less expensive overheads than traditional mobile networks, they can, for the most part, offer cheaper deals to the customer.

A typical "calls and data" combination on AU, Softbank or Docomo will run between ¥7,000 and ¥10,000 per month — depending on the amount of data and the model of phone you have signed up for. As an example, the MVNO contracts I have looked at — which do not include call time or a phone — come in at between ¥3-5,000 per month for unlimited data. However, if you can get by with just 3GB or 5GB of data per month, then in some cases this can go as low as ¥1,000 or ¥2,000 per month.

However, if you can get by on just 3GB or 5GB of data per month then in some cases this can go as low as ¥1,000 or ¥2,000 per month.

What to consider?

There are a few important things to consider before you put pen to paper on that deal, though.

First, is your current phone more than 18 months old? If so, then your current network will most likely refuse to unlock it for you. Even if they do agree to unlock it, you may still encounter compatibility problems. For example, I recently had my old AU phone unlocked by a private company. However, the phone still will not work with Docomo's network or any of its adjoined MVNOs. This is simply down to the fact that their networks run on different frequencies.

Buying a SIM-free phone

The best thing to do, assuming you can afford it, is to just buy yourself a new smartphone. I recommend using an online shopping site like Amazon or Rakuten for this. A high-grade phone like an iPhone or Samsung Galaxy will typically cost around ¥50,000 or more. However, if you aren't a slave to brands and trendy gimmicks then you can get some really good and fully functional phones in the ¥20-30,000 range, possibly even cheaper if you don't mind getting a second-hand model.

As an example: I bought a six-month-old ASUS smartphone, with similar specs to my previous AU-locked model, the Galaxy Note 3, for just ¥18,000.

When looking for bargains, be careful, and I recommend only buying from Japanese suppliers. The staff at the MVNO booth in my local Yodobashi Camera told me that only factory unlocked, SIM-free phones bought in Japan are guaranteed to work on their networks. Overseas phones may work, but there are no guarantees in this regard.

As an example, I bought a six-month-old ASUS smartphone, with similar specs to my previous, AU locked model, the Galaxy Note 3, for just ¥18,000.

Signing up

In most cases, you will need a credit card to sign up. As I mentioned earlier, MVNOs offer cheaper prices by keeping operating costs down, and as such it's much easier for them to take an automated credit card payment than to send you a bill to pay at 7-Eleven or another convenience store each month.

Pay attention to the speed and data limits on offer. Also, how much extra does it cost to make calls? As an example, U Mobile offers an unlimited data SIM card for just over ¥3,000 per month, however, calls cost an additional ¥30 per minute. So, it really depends on if you're the type of person who makes a lot of calls, or if you're ok calling through Skype, Line and so on.

Another area to consider carefully is the daily data limit. For example, while the aforementioned plan from U Mobile has no monthly data limit, the staff did warn me: "If you use more than 2 or 3GBs in one day, then the network might go slow for a while."

This is a common practice around the world to prevent users abusing "unlimited" contracts. It is kind of annoying if it kicks in when you're halfway through a movie on Netflix though!

There is also anecdotal evidence that in times of high traffic — for example early evenings or weekends — that MVNO networks tend to suffer more slowdown and connectivity issues than the established networks. This isn't official, though, and could perhaps be explained through other means.

Finally, there's still the issue of a contract. Yahoo Mobile insists on a two-year contract, which means they have many of the same handicaps as the major carriers. Other MVNO providers usually require a commitment of six months to one year depending on the type of contract.

The small print

Overall, moving to an MVNO is a bit like renting your own apartment in Japan: if you can afford the initial setup costs and you have the wherewithal to fill out all the Japanese paperwork, then you will almost certainly save substantial amounts of money. Some people, however, prefer the security of being with a bigger, more established firm. It really depends on your own financial situation. I certainly have no regrets about switching, but it's only been a couple of weeks. Lastly, if you are thinking of going sim-free, always be sure to read the small print!

Finally, if you're thinking of going SIM-free, always be sure to read the small print!

Source: Cutting the Contract: A Guide to Setting Up a SIM-Free Phone in Japan