Motorola has for two years been evaluating the possibilities of selling cellular telephones in Japan, but its efforts do not look assured of success, reports the New York Times. A Japanese government advisory committee estimates that the number of people using cellular phones in Japan is close on 60,000, and that it will rise to 4.5m by the year 2000. Motorola has been looking for a Japanese partner, which could offer a government licence to sell cellular services in Japan. This it found in the form of Daini Denden – a new telecommunications company set up to compete with domestic telecoms operator Nippon Telegraph and Telephone, NTT, which also operates the only cellular telephone service in Japan. The Japanese cellular network is incompatible with other cellular networks worldwide. The technical problem that this presented to Motorola was overcome when Motorola modified its cellular system to work with NTT’s, and Daini Denden agreed to accept this modified version of Motorola’s system, which is based on an international standard. Since presenting its case to the Japanese Ministry of Posts and Telecommunications however, Daini Denden has met with competition in the form of Teleway Japan. Teleway has strong government and industry connections. It is one of the newly-licensed domestic telecoms operators and it is now looking for a cellular licence, of which there will only be one under rules laid down by the Japanese government. The result is that the issue threatens to become a new point of friction for US-Japanese telecommunications trade exchange. US negotiators are questioning the Japanese government’s belief that it has an obligation to weigh not only the technicial standards but also the business prospects for a new enterprise, which can penalise foreign companies. The other possibility for the Motorola/Daini Denden group is to team up with the opposition. The two have been discussing how they might join forces, but both sides say that the talks are not progressing at all well.