NTT DoCoMo is negotiating an agreement in which it will help O2 launch an I-mode-based mobile internet service in the UK in 2005, said an industry source familiar with the discussions between the two companies.
The companies are working on a deal, which has yet to be finalised, in which DoCoMo will provide O2 with data distribution, content development services and other know-how. O2 will introduce a version of the I-mode service on its GPRS (General Packet Radio Service) handsets next year, and later on 3G handsets, according to the source, who declined to be named.
In an official statement released today, DoCoMo said it was studying the possibility of offering an I-mode service in the UK and was conducting various studies about how to advance the service in the UK, but that no agreement had been reached. The statement did not mention O2.
However, one analyst said the deal had been completed.
"It's a done deal," said Kirk Boodry, telecom analyst with Dresdner Kleinwort Wasserstein in Tokyo.
The deal should be announced next week.
The agreement won't provide DoCoMo with much revenue, but it will extend the company's brand image in Europe, Boodry said. For O2, the move will give the carrier an easy route to provide mobile internet services, taking advantage of DoCoMo's extensive experience with the I-mode technology and software, he said.
"Over the last two or three years, the mobile internet has been seen as a big opportunity for European carriers," Boodry said.
I-mode offers an easy-to-use package of content, email, games and other applications and services designed for packet-based network technologies, with a format that is nearly identical to regular Web pages.
The move plugs a gap in DoCoMo's efforts to promote the service throughout Europe.
After investing a 20 percent stake in Hutchison 3G UK (H3G) in 2000, DoCoMo had hoped that H3G UK would introduce I-mode on its 3G high-speed network. But after H3G UK failed to roll out the service, DoCoMo sold the stake back to H3G's Hong Kong parent company, Hutchison Whampoa in May and has been looking for another UK partner ever since.
Meanwhile, UK-based carriers have been rolling out rival mobile internet services.
I-mode was launched in 1999 and is popular in Japan, where DoCoMo has over 42m I-mode subscribers. As of July, the service had more than 3m subscribers outside Japan, according to DoCoMo spokesman Takumi Suzuki.
A deal withO2 would be the eleventh I-mode partnership between DoCoMo and a carrier outside of Japan.
This year, DoCoMo has announced a string of deals to promote I-mode use by carriers outside of Japan. Earlier this month, the company said it was partnering with Cellcom Israel to launch I-mode in Israel. That service will start in 2005, according to Suzuki.