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DoCoMo poised for US i-mode alliance
Posted: 17-Aug-2000 [Source: FT]

[Talks between NTT DoCoMo and SBC/BellSouth may result in an i-mode offering in the US.]

New York -- "DoCoMo is in talks that could give the largest Japanese mobile communications company a stake in the second-biggest US company in the sector and introduce to the US a mobile internet service of the kind that has proved hugely popular in Japan.

"The discussions, which are still at an early stage, could leave DoCoMo with a minority stake in the joint venture being formed from the mobile operations of SBC Communications and BellSouth. The two local telecoms companies, which dominate the southern and western regions of the country, plan to expand their new company nationally after it is launched this autumn.

"The move comes at a politically sensitive time in the US, with opposition growing in Washington to foreign government-controlled companies taking control of US communications companies.

"DoCoMo's parent, NTT, is still majority-owned by the Japanese government and has faced a security review from the Federal Bureau of Investigation in recent weeks over its planned acqusition of Verio, a US internet company.

"The discussions centre on a partnership to offer mobile internet services in the US, using the expertise that the Japanese company has gained at home through its hugely successful i-mode service. I-mode is the most extensive mobile internet service and already has more than 10m users.

"If an agreement is reached, BellSouth and SBC would be the first to introduce advanced mobile internet services similar to i-mode to the US market. This is currently restricted to Japan and Hong Kong, although DoCoMo's European partner, KPN Mobile, plans to introduce a similar service in Europe possibly later this year.

"An alliance would also bring the two US carriers a financially powerful partner at a time when they are planning significant extra investment to expand their joint network.

"While its 18m wireless customers will make the new joint venture second only to Verizon Wireless, it reaches only around two-thirds of the US population and has set its sights on buying or building networks in other parts of the country.

"For DoCoMo, which was thwarted by Deutsche Telekom last month in its attempt to forge a link with VoiceStream, another US wireless company, a deal would give it an entry into the important US market.

"DoCoMo has said it is only interested in tying up with operators in the US which have national reach and an interest in adopting W-CDMA, the technology standard that DoCoMo will use when it launches the world's first Third Generation high-speed internet service in Japan next Spring.

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