By Mayumi Negishi

TOKYO (Reuters) - After a decade as the dominant provider, NTT DoCoMo Inc can no longer say it provides most Japanese with their mobile phones, March figures show, with smaller rivals grabbing share in a fierce fight ahead of the start of the academic and business year.


DoCoMo, the mobile wing of former telephone monopoly Nippon Telegraph and Telephone Corp , held a 49.7 percent share of Japan's total mobile phone and personal handyphone market at the end of March, down from 50.2 percent in February, the Telecommunications Carriers Association said on Monday.

DoCoMo said it was the first time in about a decade that its market share had fallen below half.

"As user needs become varied, it's hard for any one carrier to hold on to a majority of market share," said Shinji Moriyuki, a senior analyst at Mitsubishi UFJ Securities.

"Softbank is winning in this changing market because it has a retailer's eye for pricing, design and services, while the others are still thinking like telecom firms."

March is a big month for mobile phones, with carriers fighting to sign up students and new corporate recruits ahead of April -- the start of the academic and financial year in Japan.

The race for new signings was won this year by No.3 carrier Softbank Corp , just ahead of second-largest carrier KDDI Corp .

Despite a marketing blitz to try to keep pace with its price-cutting rivals, DoCoMo signed on 173,700 net new users in March -- only around a third of Softbank's 543,900 new subscribers or KDDI's 500,500 users.

The figures measure new users signed up minus those that leave each company, and that is where DoCoMo is feeling the pain, after a rule change in 2006 allowed customers to switch companies while keeping the same phone number.

DoCoCom shed 137,000 users who kept their numbers while switching to KDDI or Softbank, bringing total defections to 916,400 users in the year to March.

KDDI, which in March launched a new discount scheme allowing KDDI-using family members to call each other free, snagged a net 75,700 users from rivals in March to Softbank's 60,800 on a net basis.

Shares of Softbank closed up 6.3 percent at 1,980 yen, KDDI gained 4.1 percent to 691,000 yen and NTT DoCoMo rose 1.3 percent to 159,000 yen. (Editing by Michael Watson)
© Copyright 2007 Reuters.

Photo:
Back in 2003, things were still looking good for DoCoMo. This is the Wristomo wristphone that was all the rage back then.