Japan and China are looking at cooperating on next-generation cellphone services, which would help China develop its wireless technology and Japanese makers expand in China, a Japanese government official said.

Japan's mobile services use third-generation networks, which allow higher-speed data transmission than the second-generation services that still dominate in China. Sharp Corp, Panasonic Corp and other Japanese cellphone makers have struggled to make inroads in the Chinese market, the world's biggest, partly due to technological differences while rivals like Nokia have been more successful.

The Nikkei business daily reported that Japanese Prime Minister Taro Aso and Chinese Premier Wen Jiabao are expected to agree on an alliance in new equipment and broadband services, when they meet on Wednesday in Beijing.

The two countries will also jointly conduct research applications and develop content such as video and music, the paper added.

Jun Mizutani, an official at Japan's Ministry of Internal Affairs and Communications said the two countries' are likely to cooperate on third-generation and future-generation mobile phone services but said specific details had not been decided.

China aims to bolster the technological prowess of its companies through the move. Foreign firms currently account for more than 70 percent of China's cellphone market, the paper said.

Japanese cellphone makers are eager to expand overseas as the domestic market has matured and phone sales have fallen with the introduction of a new sales model.

(Reporting by Sachi Izumi; Editing by Edwina Gibbs)

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