Japanese operator DDI Pocket will start offering a mobile service next month with a massive 1Mbit/s data download, compared to the usual 128Kbit/s of high-speed mobile networks.

The new service will make use of up to eight PHS (Personal Handyphone System) data channels to deliver a 256Kbit/s connection and then use software data compression to push the effective throughput to around 1Mbit/s, explained Yoichiro Yatsurugi. Yatsurugi will take over as president of DDI Pocket at the start of February, at the same time as the company changes its name to Willcom.

Like the carrier's existing service that combines up to four 32Kbit/s PHS channels, the new service will be a best-effort service. The actual speed will depend both on the number of free channels available from each base station and also the extent to which data being sent and received can be compressed.

In a demonstration in Tokyo this week, the service was delivering an average speed of 710Kbit/s, with a maximum of 811Kbit/s and a minimum of 507Kbit/s.

PHS is a microcell-based wireless communications system that was developed in Japan and commercialised in the latter half of the 1990s. The service was initially welcomed by users for its low price. However, it began to lose subscribers when prices at conventional cell phone carriers began to drop. From a high of around seven million subscribers in late 1998, there are now about four million PHS users in Japan.

About three-quarters of these users are on DDI Pocket's network, which has been able to retain users in part because of a flat-rate data service.

The new service will cost ¥11,088 (£58) per month for an "all-you-can-eat" option. A second option that offers up to 25 hours of use per month will cost half that at ¥5,544. In contrast, the current128Kbit/s service costs ¥7,938 per month flat-rate and ¥3,969 for 25 hours a month.

The service is likely to increase competition in the mobile data communications market in Japan. Several companies operate networks of a few hundred wireless LAN hot-spots and offer a similar flat-rate service. However, the coverage area is far more limited.