DDI Corp.'s nine struggling personal handy-phone system firms plan to merge on January 1, 2000, creating an unprecedented single company to cover the entire nation, company executives announced Thursday.

Haruo Taneno, vice president of DDI, a long-distance telecommunications carrier, will become the chairman of the new firm, tentatively called DDI Pocket Corp. Takeshi Okada, president of DDI Tokyo Pocket Telephone Inc., will become president.

After the merger, the new company will work to improve its financial base, reduce costs to operate services, and speed up the decision-making process, DDI President Yuusai Okuyama told a press conference Thursday.

The DDI Pocket Telephone group, affiliated with DDI, held 59.7 percent of the PHS market at the end of July. The firms have collected 3.4 million customers since they began PHS services in July 1995. But its member firms have been laden with cumulative losses as a result of stiff competition.

Cellular phone services were once much more expensive than PHS, but fees have recently been slashed to narrow the gap.

Liabilities are expected to exceed assets at six of the nine PHS firms -- covering the Tokai, Hokuriku, Kansai, Chugoku, Shikoku and Kyushu regions -- by combined 110 billion yen as of the end of March 2000, according to DDI.

"Because we started PHS services with insufficient infrastructure (such as antenna facilities), people started getting the impression that there were some difficulties with voice transmission through PHS," said Taneno. "Now PHS functions have been upgraded with infrastructure fully built, and we would like to change the public view."

After the merger, the group plans to raise additional capital to bolster its balance sheets and enhance nationwide network services, the executives said.

DDI Tokyo Pocket Telephone, the surviving entity after the merger, will increase its capital by allocating stock worth 2.97 billion yen to DDI by Sept. 30.

DDI is also planning to give up 7.6 billion yen of its 9.9 billion yen in outstanding loans to six of the nine regional carriers on Sept. 30.

DDI and the nine DDI Pocket Telephone firms will hold a joint board meeting in late October to decide on a share issue totaling some tens of billions of yen, according to DDI.

DDI is expected to buy a majority of the new share issue and consequently further raise its ownership in the phone group from its current 80 percent, sources said.