NTT Docomo Inc. is set to reduce fees for customers who take their business elsewhere after the end of two-year smartphone contracts, responding to government warnings that its current practices may be ripping off consumers.

Kazuhiro Yoshizawa, NTT Docomo president, who revealed the company’s plan in an interview with The Asahi Shimbun, said the new rules will be rolled out by the end of fiscal 2018.

Under current rules, when a 24-month fixed-term contract ends, the contract is automatically renewed for another two years. Customers can decide to switch plans, carriers, or stop having a mobile phone entirely during the 25th and 26th months, without incurring a penalty fee.

However, if they decide to switch carriers or stop using mobile phones, they are still liable to pay the full “communication fee” part of their monthly bill for the 25th and 26th months even if they leave NTT Docomo during that two-month window period.

If a user switches carriers at the end of the 24th month, they become liable to pay a penalty of 9,500 yen ($86).

In June, the internal affairs ministry urged NTT Docomo to review such rules in light of concerns that they are unfair to consumers and possibly illegal. The ministry also asked the same of the other “big three” carriers KDDI Inc. (au) and SoftBank Corp., which have similar rules.

Yoshizawa said his company is exploring the idea of bringing forward the penalty fee waiver period to start from the end of the 24th month, so that users can avoid being hit with the extra charge in the 25th month.

“We are considering ideas that would benefit customers and not incur charges,” said Yoshizawa, adding that the company will make its decisions while taking note of their two rival companies’ moves.

He said the company is also discussing many other ideas, including calculating data communication charges on a daily basis during the 25th or 26th months, as opposed to the current system in which the charges are not calculated on a daily basis, meaning customers are charged the full monthly fees.

He also said that the company will start accepting requests to unlock NTT Docomo’s SIM-locked mobile phones from people who bought their phones secondhand.

Currently, the company only accepts such requests from those who bought their phones new.

“There are people who want to buy secondhand phones, so we will cater to those demands,” Yoshizawa said.