Five Japanese companies — Fujitsu, Matsushita, Mitsubishi, NEC and Sharp — have been supplying 3G handsets to Docomo. Motorola began supplying handsets in July.

Docomo is seeking other overseas suppliers to expand the price range of its handsets. It agreed in June to jointly develop FOMA handsets with LG Electronics. They will support dual mode of W-CDMA and GSM/GPRS and also Docomo's i-mode service. The first joint handsets will hit the market next spring.

"It is a challenge how to procure cost-competitive handsets in volume," said Docomo President Masao Nakamura. "We welcome overseas handset manufacturers that have an interest in supplying handsets to us. Nokia is one of potential suppliers. We are talking with Nokia now, but nothing has been nailed down yet," he said.

In May, eight overseas operators that license the i-mode Internet service jointly procured LG Electronics' GSM handsets and started selling the service to local customers. Docomo did not participate in the joint procurement, but said it is considering joint procurement of W-CDMA handsets with i-mode licensees to lower handset costs.

Docomo also reported first quarter results ending June 30. Sales declined by 2.8 percent to ¥1,221 trillion (about $1.1 billion). Operating profit grew by 4 percent to ¥28.8 billion (about $259 million). Price revisions to strengthen competitiveness exerted major downward pressure on revenues, but extensive cost-cutting efforts resulted in gains in operating profit.

Nakamura said, "We have started this fiscal year with a favorable performance in the first quarter vis-a-vis our annual forecast for the year."

By: DocMemory
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