TOKYO -- Kansai Electric Power Co. and KDDI, one of Japan's three leading mobile service providers, plan to team up and offer package discounts, sources said Saturday.

Kansai Electric and KDDI, which also offers optical line services, will initially provide the discount packages in the Tokyo metropolitan area, Tokyo Electric Power Co.'s traditional service area. The partners will later consider expanding into other areas, such as the Tokai region in central Japan.

Kansai Electric, based in Osaka, western Japan, is the nation's second-largest electric utility by sales after Tepco. Kansai Electric and KDDI plan to launch the discount packages during fiscal 2016, which begins next April.

Kansai Electric's move coincides with the planned full liberalization of Japan's retail electricity market that same month, when households and other small-lot electricity users will be able to freely choose their suppliers.

At present, households and other small-lot electricity users can purchase electricity only from their region's major electric power company. The retail electricity market for factories and other large-lot users has already been liberalized.

Kansai Electric hopes to use the alliance to grab customers from Tepco. To secure enough electricity, the utility is planning to build large-scale thermal power plants in the Tokyo metropolitan area and elsewhere.

Kansai Electric has incurred net losses for four consecutive years, through fiscal 2014, due to its reliance on thermal power generation. Japan shut down its nuclear power plants after the 2011 earthquake and tsunami led to three meltdowns at Tepco's Fukushima Daiicihi plant.

KDDI also expects to gain subscribers through the alliance. It currently has some 43 million subscribers to its mobile phone services across Japan, including about 18 million in the Kanto region, around Tokyo.

Tepco, meanwhile, is poised to form a similar alliance with SoftBank, another of Japan's leading mobile carriers, and expand into the Kansai region and elsewhere.

(Nikkei)