NTT DoCoMo, the world's first third-generation (3G) mobile phone operator, has said more people are using the service but that they were spending less.

The average revenue per user in the three months to 30 June fell by 7.5% from the previous quarter and was down 25% from October to December, the first quarter after its launch.

As an overall trend, we continue to see our users spending less time on voice conversations and an increase in i-mode traffic

NTT DoCoMo

"The number of users is going up, but the average monthly spending has fallen due to various discount campaigns that focused on raising the number of third-generation phone users," said a DoCoMo spokesman.

The 3G service offers face-to-face communication with video conferencing and fast internet connection.

The fall in revenues is bad news for DoCoMo, Japan's largest mobile phone operator, which had pinned its hopes on 3G profits after the conventional mobile phone market reached saturation.

NTT DoComo's 3G performance has been closely watched by domestic and overseas mobile operators who have paid hefty licence fees and heavily invested in infrastructure.

Next generation?

DoCoMo blamed the fall in revenues on discounts it offered during the quarter.

From April it cut basic 3G fees by up to 55% for existing subscribers of 2G services to upgrade.

Subscribers have reportedly been reluctant to sign up to the new service because of poor battery life, limited coverage area and costly handsets.

The company's 3G subscribers totalled 114,500 at the end of June, up from 89,000 in March, but less than one-tenth of its rival KDDI, despite launching six months earlier.

The company also said more people were using their mobile phones to email and surf the internet but less for talking.

"As an overall trend, we continue to see our users spending less time on voice conversations and an increase in i-mode traffic," said a spokesman.