Users of NTT DoCoMo's 3G service will soon make up half of all the carrier's subscribers, and will account for two-thirds of its subscribers by this time next year, the company said Friday.

NTT DoCoMo became the world's first carrier to launch a commercial 3G service based on the Wideband Code Division Multiple Access standard when it started service in the Tokyo area in October 2001. By the end of March this year it had amassed 23.5 million subscribers for the service, representing 46% of all cellular subscriptions. It expects this to rise to 35 million users, or 66% of subscribers, by March 2007.

The service initially failed to attract many subscribers and started to look like an expensive mistake. But the carrier continued to invest money in the network and on the joint development of phone handsets and subscriptions began to take off.

NTT DoCoMo plans to invest ¥905 billion (US$7.92 billion) in the coming year, mostly to expand and improve the 3G network. At present it operates about 30,000 base stations, and the figure is expected to jump to about 44,000 by this time next year.

"We are focused on investment in the service area," said Masao Nakamura, NTT DoCoMo's president and CEO, at a Tokyo news conference to announce the company's annual financial results.

In the middle of this year it will start to upgrade its 3G network to offer higher-speed data services based on high speed downlink packet access. The service will initially be available in the Tokyo area, and expanded to reach about 70% of the country by March 2007, Nakamura said.

During the fiscal year from April 2005 to March 2006, the carrier recorded a net profit of ¥610 billion, down 18% from the year earlier. Operating revenue fell 2% to ¥4.8 trillion on lower service revenue resulting from service discounts and lower handset sales, Nakamura said.

The IDG News Service is a Network World affiliate.