TOKYO — Japanese mobile operator NTT Docomo is prepared to pay up to half the costs of developing third-generation (3G) mobile phone handsets in an effort to kick-start its struggling 3G service. Heretofore, development expenses have been met fully by handset manufacturers.
The mobile service provider said the initiative would last for a limited but unspecified time, adding that the first three beneficiaries are likely to be NEC, Fujitsu and Matsushita Electric — the three companies Docomo has chosen as handset suppliers for its 3G service, called FOMA.
Docomo said it estimates the development cost per 3G handset model to be ¥10 billion (about $84 million), but declined to comment on the total subsidies it would provide handset manufacturers this year.
According to reports in the Thursday (Jan. 16) edition of Nihon Keizai Shimbun, Docomo plans to pay handset makers subsidies totaling ¥40 billion (about $330 million) this year. The network operator is expected to extend the subsidies to at least ten 3G handset manufacturers.
Part of the subsidies will go towards the cost of securing joint patents and copyrights on technology used to develop 3G handsets.
Currently, 3G handsets are sold at a relatively high retail price of around ¥35,000 ($290), which has slowed sales. Following the subsidies, the cost of 3G handsets is likely to be reduced by about ¥5,000 ($42), Docomo said.
Docomo's year-old 3G service has suffered with slow growth, partly due to bulky, heavy and expensive handsets. In December, the firm had only 152,000 subscribers to FOMA, while rival KDDI had 4.8 million subscribers to its next-generation service, which uses cdma2000 1x technology from Qualcomm Corp. KDDI's service was launched last April.
