For the first time in its history, the wireless operator has been overtaken by its rivals in the race to attract new customers, according to the Telecommunications Carriers Association in Japan.

DoCoMo has finished in third place with a total of 139,000 new subscribers for May 2002, well behind KDDI with 150,200 new customers and Vodafone’s J-Phone with 140,200.

According to industry observers, DoCoMo has to improve in two critical areas — handset design and availability — if it hopes to challenge its rivals.

A case in point, DoCoMo has just released its first camera-equipped mobile phone and photo messaging service, while others carriers, like KDDI and J-Phone, have been offering them for several months.

A few weeks ago, DoCoMo introduced its ‘i-shot service’ that allows customers to transmit still pictures taken with the ‘mova SH25i’ camera-equipped mobile phone. There is no subscriber fee for the service, and users pay a transmission charge based on the size of the data being sent.

Claiming the title of the world’s first high-speed service has not translated into the number of tech savvy users DoCoMo had expected. With only 112,300 subscribes at the end of May, DoCoMo’s FOMA is well behind KDDI’s CDMA2000 1X service with 695,700.

While DoCoMo is losing some of its prestige at home, it continues to attract foreign followers looking to emulate its success. Recently, KG Telecom announced that it will launch i-mode services in Taiwan, while Dutch-based mobile carrier KPN Mobile has agreed to promote a 3G mobile service, similar to FOMA, in the Netherlands.