France the next DoCoMo target


The i-mode service is sometimes called "2.5G," with DoCoMo already offering full 3G service in Japan

By Alex Frew McMillan
CNN Hong Kong

TOKYO, Japan (CNN) -- Japan's largest mobile-phone company, NTT DoCoMo, has struck a deal with Bouygues Telecom to offer wireless Internet access in France by year end.

Bouygues is the No. 3 mobile operator in France and is 65 percent owned by the Bouygues construction, media and telecom group.

DoCoMo confirmed the deal Wednesday after it was reported in the Japanese economic daily, the Nihon Keizai Shimbun.

The 10-year deal stays valid through April 16, 2012 and gives Bouygues the option to extend DoCoMo technology on a third-generation, or "3G," network.

The deal takes DoCoMo's service into yet another key Western European nation, after the company launched its i-mode service in Germany in March.

It launches in the Netherlands this week and in Belgium in June. In all cases, DoCoMo picked a local cell-phone partner, typically the Dutch company KPN Mobile. The Japanese company is a 15 percent owner of that.

"The service has already been successfully deployed by E-Plus in Germany and will be launched by KPN Mobile in the Netherlands on April 18, 2002," DoCoMo President Keiji Tachikawa said, in a release.

"With Bouygues Telecom on board, we are glad to see the further expansion of the i-mode community in Europe," he stated.

First fully licensed deal

The French deal does not involve equity. It is the first time DoCoMo will merely license its technology rather than owning a share of its partner.

Bouygues Telecom has 6.6 million customers, which would boost DoCoMo's total market to 20 million in Europe.

DoCoMo first unveiled its i-mode service three years ago, and followed that with the release of its third-generation (3G) cell phone service in Japan late last year. The rollout was marred by problems with the software.

DoCoMo's i-mode customers in Japan can now use the screens of their cell phones to read e-mail, look at news, buy tickets and handle banking. DoCoMo will license that technology to Bouygues, including a system for billing customers according to how much data they get on their cell phones.

"I-mode means friendly, easy to use and highly efficient multimedia services, which our customers are eager to discover", Bouygues Telecom CEO Gilles Pelisson said, in a release.

The Nikkei says that NEC and Matsushita Communication Industrial Co. will make the cell phones, the same partnership that makes DoCoMo's 3G cell phones in Japan.

A "2.5G" service

That service is more advanced, carrying pictures and video, leading some industry watchers to dub i-mode "2.5G." The i-mode service has attracted around 32 million customers, and is rising fast.

However, analysts remain divided about how popular advanced cell-phone services will ultimately be, with many of the functions available on other devices such as hand-held assistants and laptop computers.

A 3G phone retails for 45,000 to 60,000 yen in Japan (roughly $340 to $450), with a camera installed.

DoCoMo, which means "Anywhere" in Japanese, has more than 50 percent of the cell-phone market in Japan.

DoCoMo stock jumped on word of the deal, but dipped toward the close. It ended up 1.5 percent at 334,000 yen, after going as high as 338,000 yen.

The benchmark Nikkei 225 index closed up 1.74 percent at 11,543.71, mainly on the back of technology stocks and DoCoMo, now the largest listing in Tokyo.