NTT DoCoMo Inc. will start shouldering half the cost of developing handsets for its FOMA third-generation cellular phone service, company sources said Thursday.

The sources confirmed a Nihon Keizai Shimbun report that the company will provide a combined 40 billion yen in aid this year to handset manufacturers, including foreign firms.

Handset makers to date have entirely assumed the expense of developing products.

NTT DoCoMo wants to reduce retail prices of its FOMA handsets by assuming half the development costs, which are nearly 10 billion yen per model, the sources said.

Retail prices of FOMA handsets are stuck at high levels, usually around 30,000 yen, resulting in sluggish sales.

The business daily said NEC Corp., Fujitsu Ltd. and Matsushita Electric Industrial Co. will each receive about 4 billion yen for handsets they plan to release this month.

The remaining 28 billion yen will be provided later this year to help finance the development of other handset models, including those made by foreign makers, it reported.

DoCoMo bonds rated

Moody’s Investors Service Inc. said Thursday it has assigned a rating of Aa1 to NTT DoCoMo Inc.’s four-year 50 billion yen bonds, due in 2007.

The U.S. credit-rating agency said the rating reflects NTT DoCoMo’s dominant market position, its strong financial profile and its relationship with Nippon Telegraph and Telephone Corp.

But Moody’s said the rating outlook is negative, reflecting the agency’s concern over the future of NTT DoCoMo’s competitive advantage in third-generation telecommunications services, which is important for maintaining the long-term stability of the company’s cash flow generation.

NTT DoCoMo is to issue the 0.3 percent coupon bonds to individuals, the first of their kind issued by the dominant mobile phone service provider to individual investors, with payment due Jan. 31.

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