iMode developer targets US with AT&T deal

NTT DoCoMo, developer of the iMode wireless internet platform that has taken Japan by storm, has bought into the US mobile phone market by taking a 16 per cent stake in AT&T Wireless for $9.8bn.

The companies will share resources to address the wireless needs of multinational businesses in the US and Japan, while AT&T will license iMode for the US market.

The deal is the latest in DoCoMo's plan to take iMode global. The company recently licensed the rival to Wap technology to KPN Mobile and Hutchison in Europe.

As part of the announcement, AT&T will accelerate plans to introduce a national wireless data service by overlaying a GSM/GPRS platform to its existing network, and confirmed that it expects to roll out third-generation mobile technology in 2003 and 2004. AT&T is the US's third largest mobile phone operator.

Some analysts said the deal will have more of an impact on AT&T's image as a wireless operator than shake up the slow-moving and fragmented US mobile phone market.

"I don't see iMode being a bit hit in the US," said Susan Billheimer, an analyst at Zona Research. "US consumers don't appear to want to surf the internet on their mobile phones when they can surf using their PCs."

iMode burst into the Japanese market in early 1999 and today counts more than 15 million local subscribers - and DoCoMo is adding 50,000 new users each day. The technology has done well in the Japanese market because it enables consumers to not only access the internet, but order tickets, food and do banking over the web.

One of the technology's most popular applications has been the ability to receive daily cartoons over iMode phones.