DoCoMo offers free calls to retain users

NTT DoCoMo, Japan's biggest mobile phone operator, will offer 24-hour free calls between family members as it fights to keep users from switching carriers, a Reuters report said.

The Reuters report said the move is likely to hurt profit at DoCoMo, already struggling to keep pace with a price war triggered by No. 3 Softbank Corp , analysts said.

Softbank, which bought Vodafone's Japan unit in 2006, has gone on the offensive by slashing rates, forcing bigger rivals DoCoMo and No. 2 KDDI Corp to match its prices, the Reuters report said.

DoCoMo twinned the discount with a monthly fee hike to 315 yen from 210 yen for its popular i-mode wireless internet service. The moves together would drag down annual operating profit by 3% to 4%, Lehman Brothers analyst Tetsuro Tsusaka, quoted by the Reuters report said.

'If DoCoMo and KDDI follow Softbank's lead and offer student discounts, that would be another 4% to 5% decline in operating profit,' he said.

Softbank plans to scrap monthly basic fees for three years for students signing up with the carrier for the first time, the report said.

KDDI last week said it would offer round-the-clock free calls to registered family members that also subscribe to KDDI, and analysts had said they expected DoCoMo to follow suit.