Photo/IllutrationNTT Docomo Inc. President Kazuhiro Yoshizawa announces the company’s new smartphone return program in Tokyo’s Shibuya Ward on May 16. (Takuya Sumikawa)

NTT Docomo Inc., the nation's largest carrier, announced May 16 a new plan to reduce the total amount of monthly payments for smartphones by one-third by allowing owners to turn in their devices after two years into their three-year contracts.

The new smartphone return program will be launched on June 1.

If customers purchase a smartphone on a 36-month payment plan and return the device to the company after two years or later, the remaining installment payments for up to 12 months will be exempted.

NTT Docomo hopes to encourage customers to switch smartphones through touting the reduction of payments to help maintain its current sales level.

The communication carrier’s new strategy was designed in response to the revision of the Telecommunications Business Law that will prohibit “package sales” from autumn.

Carriers have utilized the package sales strategy to offer customers a deep discount on purchasing mobile phones on the condition that they also sign up for a long-term communication plan with them.

However, carriers have come under fire for charging high monthly communication fees to consumers, who are locked into long contracts for their smartphones.

Under NTT Docomo’s new plan, two years after the purchase of a smartphone, owners can choose to get a new device after returning their old ones.

Users will be exempted from paying their remaining loans even if they do not buy their new device through NTT Docomo or renew their communication plan with the carrier.

After the launch of the program, 30 types of smartphones that are in the high-priced group at 80,000 yen ($729) or higher will be eligible for the plan.

Comparing the total financial burden--the cost for purchasing smartphone devices and monthly communications fees, the burden under the new plans will be 12 percent to 14 percent lower than the current plans for both groups of users who switch their devices in two years and those who continue to use their devices for three years, according to NTT Docomo.

For both groups, the cost of smartphones will be relatively higher than before, but the monthly communication fee will be lower.

KDDI Corp., another telecommunication giant, recently announced new plans with lower communication fees as the industry will be forced to separate the costs between devices and monthly fees from autumn.