Japan has the potential to play a key role in the next global economic boom, which will be based around the application of new mobile networks to physical industries such as manufacturing and transportation to boost consumer welfare, and increase productivity, real wages and job growth.
Indeed, Prime Minister Shinzo Abe’s emphasis on structural reform as the “third arrow” of
Abenomics can help lead the way to such a transformation. However, the government’s increased willingness to intervene in the mobile sector—such as issuing guidelines on how carriers should price handsets–runs the risk of going against the spirit of Abenomics and structural reform.
In this paper we lay out the reasons why increased Japanese government intervention in the mobile sector will likely hurt consumers in the long run, rather than help them, and slow down the innovation and investment needed to be a global technology leader.