NTT DoCoMo, Japan's dominant mobile phone company, is to lower the rates it charges other mobile phone operators to connect calls to its network.

The fee reductions of 16 per cent for calls inside DoCoMo's service area and 12 per cent for those outside its service area, come as the operator faces growing calls for tighter regulation over its fees. The Japanese telecoms authorities are proposing to introduce dominant carrier regulation to force DoCoMo to publish its interconnection fees and conditions as a way to stimulate competition in the mobile market.

The move reflects growing concerns that DoCoMo's dominance enables it to charge excessively high interconnection fees to other operators which must connect calls to DoCoMo's network.

Under the new proposals, DoCoMo, which has a 58 per cent share of the domestic market, would have to receive the approval of the authorities for its interconnection fees. This is expected to lead to lower interconnection fees, the telecoms regulator believes.

The move to regulate DoCoMo as a dominant carrier comes in the wake of calls from the US and the EU for further measures to spur competition in Japan's telecoms market.

DoCoMo's latest move "will have no impact on the reforms being proposed", said an official at the Ministry of Public Management, Home Affairs, Posts and Telecommunications.

However, influential members of the ruling Liberal Democratic Party are strongly opposed to the legislation, which they fear could undermine the international competitiveness of one of Japan's most promising growth companies.

DoCoMo's high domestic market share is unmatched in other developed countries. In Korea, SK Telecom is being forced by the regulator to reduce its market share to below 50 per cent.

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