Japan's KDDI plans US MVNO

Japanese mobile phone giant KDDI plans to launch a mobile phone service in the US, according to local media reports. Rather than attempting to build its own network, the Japanese firm will act as a so-called Mobile Virtual Network Operator (MVNO), renting spare capacity from a US carrier.

With little room for growth in their saturated home markets, mobile service providers in more prosperous Asian nations are looking overseas for space to expand.

However, the US market has proved a challenge for Asia's mobile telcos. KDDI's local rival NTT DoCoMo's attempts to gain a toehold in the US were not successful. Helio, a joint venture of South Korea's SK Telecom and US ISP EarthLink, has found growth difficult.

Rather than going all out to win US customers, KDDI plans to target a niche service at Japanese-speaking residents and travellers, Kyodo News reported, citing KDDI sources. Information on the new service's website, at KDDImobile.com, suggests that KDDI will not be offering its most sophisticated Japanese handsets to US customers.

Unlike existing US carriers, the service will be tailored to handle Japanese input and display, as well as providing Japanese download and information services.

KDDI will rent mobile network bandwidth from US carrier Sprint Nextel for the service.

SK Telecom's Helio, the most prominent US MVNO established by an Asian carrier is targeted at young and relatively prosperous US consumers. SK Telecom does not expect Helio to begin turning a profit before 2009 at the earliest, according to SK Telecom CEO Kim Shin-Bae. The service currently has fewer than 200,000 users.