J-Phone ready to take on DoCoMo

By CNN's Kristie Lu Stout

TOKYO, Japan (CNN) -- NTT DoCoMo commands over 60 percent of Japan's mobile market, but it may not be long before rival J-Phone starts snapping at its heels.

J-Phone, the wireless arm of Japan Telecom, has over 10 million subscribers, with many more to come. The growth has largely been fueled by J-Sky, its Internet data service.

But analysts say continued growth will no doubt flow from J-Phone's alliance with Vodafone, the largest mobile group in the world.

In the last year alone, J-Sky's user base surged 600 percent -- attracting scores of young urban hipsters to its high-quality, low-cost service.

The young and wired of Tokyo's trendy Shibuya district point to J-phone's low price and Internet services when asked what inspired their J-Phone purchase.

One satisfied customer said that famous actress and perky J-Phone spokesperson Norika Fujiwara inspired his choice.

But sexy advertising isn't the main reason for J-Phone's growing popularity. The mobile operator is now part of the Vodafone empire.

Vodafone in the driver's seat

Vodafone recently paid $5.3 billion to lift its stake in J-Phone from 26 to 46 percent -- a deal that gives Vodafone more steering power to take J-Phone out of DoCoMo's shadow and to the top.

"We're already enjoying the benefits of the greater scope and scale that Vodafone gives us when we're purchasing so we're buying a lot of infrastructure, a lot of handsets," J-Phone managing director John Thompson told CNN.

"For our third generation, we're already cooperating with Vodafone to achieve better prices for our network infrastructure thereby reducing our investment."

John Thompson was sent to Japan by Vodafone to drive the J-Phone business, a move that represents just how "hands on" Vodafone is with its investment.

Analysts like Tim Clark at Ion Global's Tokyo office are already lauding the alliance.

"With the Vodafone deal, we may see some international tie-ups," said Clark. "Certainly they are going to come out with new services addressing the younger user market, and even a sharper focus on online services that will help them drive their voice traffic."

But driving the mobile operator at full-speed to better compete head-to-head with DoCoMo is a hefty task.

So the operator is focusing on one thing -- what it does best.

Aiming to offer roaming 3G

"Although we launched in 1994 after the other operators here, we built up a reputation as an innovator," said Thompson.

"So we were the first to offer mobile messaging, the first to offer mobile email, the first to offer all color content on our Internet service, the first to have an integrated handset, we had the first downloaded mobile ring tones and melodies…"

Despite such a track record, J-Phone will not be the first to offer full-scale third-generation wireless services. Japanese mobile giant NTT DoCoMo's 3G trial services are already underway in Tokyo.

But when its 3G service launches next June, J-Phone could be the first to offer 3G international roaming -- getting customers connected from over 30 countries around the world.

"When it comes to 3G, international roaming is important," J-Phone's Thompson told CNN.

"That's new, completely new to Japan and using the Vodafone network of over 30 countries worldwide I'm sure we'll be able to offer very attractive international roaming services both for customers in Japan and visitors to Japan."