Softbank Mobile Corp, the latest player in Japan's cutthroat mobile phone sector, said yesterday it was questioned by the government on its promotional discounts which have triggered an avalanche of interest.
But Softbank Mobile, a unit of the Internet conglomerate, denied any legal wrongdoing on the offer, which was so popular it overloaded the system.
"It is true that our official in charge of the matter was questioned by the Fair Trade Commission, but we regard our new service as having no problem at this point," a spokeswoman for Softbank Mobile said.
She spoke after Japanese media said the government commission had questioned Softbank Mobile over its discount service announcing "zero yen for calls, zero yen for e-mails."
The Sankei Shimbun said, citing unnamed sources, that the Fair Trade Commission was concerned that the advertisement may have failed to state clearly that there were preconditions for free calls and e-mails.
Commission officials declined to comment.
Softbank, an empire built by Masayoshi Son, one of Japan's richest entrepreneurs, in April completed a mega-deal to buy British mobile giant Vodafone's struggling Japanese operations for US$15 billion.
Softbank declared a price war against industry leader NTT DoCoMo and second-ranked KDDI Corp last week as Japan introduced "number portability," which lets customers switch carriers without changing phone numbers.
Its "zero yen" campaign was matched by a flashy media campaign including TV advertisements featuring Cameron Diaz.
Softbank had to stop the portability service twice over the weekend because its computer system could not handle the massive number of applications for joining and leaving it.
The breakdown led to fierce criticism by NTT DoCoMo and KDDI, which said that some of the customers may have been trying to switch to them.
Son on Monday apologized for the technical glitch.
He also announced Softbank's latest campaign to win more users, cutting fees to make calls to users of other carriers.