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At the end of May, Kazunori Hagiwara was thrilled to be chosen to try out NTT DoCoMo’s next-generation cellphone system.

But two months after FOMA, the world’s first 3G service, kicked off, the new handset sits idle despite a data transmission speed of 384 kilobits per second.

“It’s next to useless,” said Hagiwara, who hoped to receive about 100 e-mails a day and use the mobile phone on business trips.

Some problems Hagiwara noted were repeatedly disrupted connections, poor battery life and a lack of content specifically designed for the faster transmission speed.

“If those (problems) remain, I won’t buy it or recommend it to other people,” said Hagiwara, who works in the marketing research section of a computer-related company in Tokyo.

The service only works in limited parts of Tokyo and reception is patchy, particularly around high-rise buildings, he said.

NTT DoCoMo Inc. looked invincible only a year ago but is now struggling toward an uncertain future.

The domestic cellphone market has peaked, and telecommunications stocks have been savaged around the globe, troubling overseas partners and affiliates into which DoCoMo has sunk 1.8 trillion yen since Sept. 1998.

Amid these uncertainties, FOMA’s troubles seem to be casting a particularly dark shadow over the company’s future.

Most telecom firms, for instance, are hesitating to launch 3G services, which will likely delay the company’s goal of forming a global network — one of FOMA’s a major selling points.

3G was seen as the key to new growth because the domestic radio frequency range for conventional cellular phones is nearly saturated.

FOMA’s troubles first surfaced in April, when DoCoMo announced it would delay the launch from May to October because of problems with handsets and antenna base infrastructure.

It instead opted to launch a trial service in May in which 4,500 people participated, including Hagiwara. But FOMA has left many users unsatisfied.

According to a DoCoMo survey, 47 percent of the trial group believe FOMA’s connection quality is poor, while 53 percent said disruptions under the service are more frequent than with conventional mobile phones.

Engineers at NTT DoCoMo are desperately working to improve connectivity and hope to establish 71 more antenna bases by Oct. 1. There are currently 214.

“Please don’t think that we will start the full-fledged service in October without correcting this situation,” said Takumi Suzuki of DoCoMo’s public relations department.

The battery life issue is also a formidable hurdle. While in call-waiting mode, FOMA cellphones must be recharged after just one day.

Since FOMA handsets use more electricity than conventional cellular phones, LSI semiconductors will have to be improved to extend battery life, according to a top DoCoMo executive in charge of network infrastructure.

“It’s not a matter of months but a matter of a year,” he said, adding that DoCoMo alone cannot solve the problem and that cooperation among handset makers is becoming a necessity.

3G technology promises wireless distribution of music and video, but the high cost of data transmission poses yet another problem.

Charges for a single data packet, 128 bytes, are set at 0.05 yen for FOMA, or one-sixth of DoCoMo’s i-mode service.

But FOMA’s transmission bandwidth is 384 kbps, or about 40 times wider than i-mode’s 9,600 bps. Ironically, this means users will have to pay more to send or receive those packets.

Without drastic rate reductions, the distribution of music or moving images will be unfeasible, said Hironori Tanaka, vice president and analyst at Morgan Stanley Japan Ltd.

“It would be much cheaper to buy a compact disc” than to download a tune via FOMA, he said.

Aware of such weaknesses, DoCoMo officials have begun stressing that their initial consumer target will be corporate users, who would use FOMA services for business applications.

DoCoMo’s prediction for subscription growth for 3G phones is also modest. It plans to start commercial services in a 30-km radius from the heart of Tokyo, targeting 150,000 subscribers by March 2002. Those using DoCoMo’s conventional cellular phones number about 38 million.

Tanaka of Morgan Stanley believes that FOMA and related services — such as e-commerce via mobile phones — will eventually help increase sales per person.

But the dramatic growth DoCoMo has enjoyed in the past several years, such as the 133 percent jump in pretax profits posted in the 1997 business year, is not likely to be repeated, he said.

“The 3G service won’t become a driving force to change DoCoMo within a few years. DoCoMo looks destined to become a company with only modest growth.”

According to the latest figures compiled by the Telecommunications Carriers Association, a total of 64.18 million cellular phones are now used in Japan, with population penetration reaching 50.5 percent as of July.

Phone shipments fall

Domestic shipments of mobile phones edged down 1.3 percent in June from a year earlier to 4.15 million units, declining for the first time since September 1999, the Japan Electronics and Information Technology Industries Association said Thursday.

The setback was due to sluggish growth of new subscribers, which more than offset an increase in value-termed shipments traced to the launch of high-priced products such as phones equipped with cameras, the association said.

The drop was also a statistical reflection of a 19 percent rise in June 2000, it said.

Shipments of personal handy-phone systems plunged 44 percent to 227,000 units, the fourth straight month of year-to-year declines.

As a result, combined shipments of mobile phones and PHS phones dipped 5 percent to 4.37 million, the first drop since April 2000.

The monthly shipment data were calculated from figures supplied by 16 mobile phone manufacturers and 16 PHS makers.

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