DoCoMo Looks To the UK Again
By Carlo Longino, Wed Jun 30 21:45:00 GMT 2004

The carrier's new president says it wants a UK partner, but unlike his predecessor, he's not looking for acquisitions.

Sticking to the roadmap he laid out last week, Masao Nakamura says DoCoMo is only looking for a "technical alliance" -- or rather a carrier to license i-mode in the UK.

DoCoMo first tried to get Hutchison Whampoa to use i-mode as 3's content vehicle there, though Hutch decided against it, leading DoCoMo to sell -- and take a bath on -- its stake in 3 UK. All told, NTT DoCoMo has written off more than 1 trillion yen, or $9.3 billion, on equity investments made under the watch of previous DoCoMo president Keiji Tachikawa. Those investments were intended to spur i-mode's adoption by carriers around the world, and have had mixed results.

i-mode has become a quiet success in some places, like France, as DoCoMo has pursued mid- and low-tier carriers, which it perceives aren't strong enough to come up with meaningful competition for Vodafone Live!, or to a lesser extent, T-Zones, on their own. Speculation is that mmO2 is the most likely target, given its small size and holdings that don't compete with DoCoMo (except in Germany, where E-Plus uses i-mode).

mmO2 could gain from joining the i-mode alliance, not just by gaining a more robust and stronger-branded content system, but also through the allied purchasing efforts of the other Euro i-mode carriers. After mmO2 rebuffed KPN's takeover offer in February, it's been -- unofficially -- on the selling block. mmO2 has been increasingly retreating to its home market, where it ranks fourth, and many analysts see a need for it to increase its international connections to be able to successfully compete against Vodafone and the group of four other major European operators.

An O2-DoCoMo deal could tie together mmO2's Starmap alliance of small carriers, which looks to gain leverage with vendors as well as integrate networks and services in different countries, with the European i-mode carriers like KPN, E-Plus, BASE, Bouygues Telecom and Cosmote -- which, like mmO2, will need as much bulk as they can amass to ward off Vodafone and other bigger, stronger competitors.