Have you heard “PHS public service in Japan is in trouble; PHS is dead.” This is dead Wrong! PHS public services in Japan are improving and increasing. PHS is thriving and in excellent health. The facts prove it.
Critics of PHS say, “There’s a problem, subscriber growth has flattened out.”

It is true that the accumulated number of PHS subscribers has slightly decreased in the past few months. This is partly due to some subscribers changing to cellular services for broader service area or more mobility. However, the major factor for the decline is that the PHS operators have been cutting off “bad” subscribers, those who intentionally do not pay their bills. These bad subscribers were signed-up initially, as a result of the intense competition between the PHS operators.

New subscribers have been joining steadily, but the number of bad subscribers cut off has been greater. So, accumulated subscriptions have declined slightly.
As a result of this improvement in subscriber quality, usage over time has increased (see Figure 1), and total communications traffic has increased (see Figure 2), this is the largest component of revenue generation for operators, despite the decrease in subscribers.
Critics also say, “There’s another problem, PHS operators have been suffering such heavy losses recently.”
In the case of infrastructure communication industries such as PHS public service, huge initial investment is required, and management plans executed over the long-term. Losses are inevitable in the initial stage, operating profits come only after 4-to-5 years, and cumulative losses are cleared only after 6-to-7 years.
Looked at like this, PHS operations in Japan are proceeding in line with long-term plans, with the situation for the operators steadily improving.
PHS was never intended to, and does not, compete head-to-head for the same market as cellular. Focused on “personal” use, the demographics of PHS subscribers are vastly different from cellular. Figure 3 shows that PHS is located in-between cellular and fixed telephone in terms of average call time.
The 32 kbit/s data transmission services were started in April 1997. Since then, data transmission traffic has leaped ahead (see Figure 4), and now has a near 10% share of total traffic. Value added services, such as the short message service and location information service, have also been attracting a steadily rising number of new users.
These self-explanatory figures show the operational status of PHS public service to be improving and expanding in Japan. PHS service is being installed or evaluated in over 25 countries, and PHS is thriving as it heads toward acceptance as a worldwide standard.