DoCoMo shares flying high on AT&T talk

November 28, 2000
Web posted at: 5:44 PM HKT (0944 GMT)

By staff with wire reports

TOKYO - Shares in Japan's biggest mobile telephone company, NTT DoCoMo, have surged on speculation that it will close a deal to buy 16 per cent of the U.S.-based AT&T Wireless Group for more than $U.S. 9 billion.

The shares booked their biggest gain since the beginning of the month. This follows a slump in the value of DoCoMo last week amid talk that the AT&T Wireless acquisition would lead to a new share issue, which would have a dilutionary effect on the existing shares.

Reuters reported its own sources as saying that a formal announcement of the deal was expected on Thursday. AT&T Corp, the parent company of AT&T Wireless, has declined to comment and DoCoMo officials could not be reached.

Selling on rumor, buying on fact

"This is a typical case of selling on talk and buying back on the event," said Toshiaki Iba, a senior analyst at Tokyo Mitsubishi Securities.

"Some investors sold DoCoMo on the initial news of the AT&T deal. Then, after it lost enough ground, they bought it back, making a handsome profit."

Earlier in the day DoCoMo shares peaked at Y2.89 million, a rise of 8.6 per cent on the day. But the stock is still down 38 percent from its year high in February, compared to a 26 per cent drop in Tokyo's benchmark Nikkei stock average over the same period.

AT&T Wireless, the No. 3 U.S. wireless telephone operator, trades as a tracking stock of AT&T. New York-based AT&T will spin off its 85-percent stake in AT&T Wireless under its previously announced plan to split into four separately-traded businesses.

NTT DoCoMo is majority-owned by Nippon Telegraph and Telephone Corp, Japan's dominant telephone services provider, which in turn is majority-owned by the Japanese Government.

Resurgence thanks to i-mode

Part of the reason for DoCoMo's resurgence with investors is its i-mode technology, developed in partnership with the Japanese toy company Bandai.

The technology allows DoCoMo mobile phone users to download pictures of baseball players and pop stars and animated characters that move when the phone rings. Users can trade characters back and forth by messaging them to each other's phones.

More than 14.7 million Japanese now use i-mode, and the number is growing at 50,000 a day.

So successful has the technology been that it will be a feature topic for discussion at the Telecom Asia 2000 in Hong Kong next week.

The conference, which takes place from December 4 to December 8, is the largest telecommunications conference this year and will be attended by leading Internet and communications companies including Cisco, Intel, 3M, Palm Inc, Singapore Telecom, Telstra and Pacific Century CyberWorks.

Bandai to develop online games for cell phones

NTT DoCoMo Net
Bandai
AT&T Wireless Services Home

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.