DoCoMo 'ending 3 UK ties'
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DoCoMo is Japan's biggest mobile phone operator.
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TOKYO, Japan (Reuters) -- NTT DoCoMo, Japan's dominant mobile phone operator, is ending its ties with conglomerate Hutchison's 3 UK third-generation phone venture, sources close to the matter say.
The venture -- 3G UK Holdings Ltd -- never delivered on DoCoMo's hopes of spreading its Internet technology i-mode into the country.
Ending the relationship would leave the door open for a new partner in Britain.
DoCoMo now may seek to link with mm02 Plc, the smallest of Britain's four mobile phone operators and the only one not tied to a large mobile phone group.
However, company sources and some analysts said a full takeover of mm02 -- Europe's sixth-largest mobile phone company with about 20 million customers in Britain, Germany and Ireland -- was unlikely after earlier overseas ventures flopped.
"At minimum, I would think DoCoMo would try to strike an i-mode partnership in the UK," said Hitoshi Hayakawa, a telecoms analyst with ING Barings.
DoCoMo invested 184.6 billion yen ($1.69 billion) in Hong Kong-based Hutchison Whampoa Ltd's 3 UK unit in December 2000 to spread its i-mode technology. The plan backfired when 3 UK, which was created to offer high-speed 3G mobile service, chose not to adopt i-mode.
DoCoMo said its relationship with 3 UK had not changed. A spokesman said DoCoMo still hoped to work with the company to eventually roll out i-mode.
Sources said DoCoMo was working through the finer details of pulling out of the investment, but the relationship had already effectively ended. One source also said the company was waiting to set a future UK strategy before making an announcement.
DoCoMo's decision comes on the heels of a similar move last November by Dutch carrier KPN to sell back its stake in 3 UK to Hutchison.
Hutchison agreed to pay £90 million ($168 million) for KPN's 15 percent stake, for which it originally paid 1.2 billion euros ($1.5 billion) three years ago.
While 3 UK is not publicly listed, analysts also believe DoCoMo's stake in the company has dwindled to almost nothing.
DoCoMo has refrained from large investments abroad recently, declining to bid for U.S. operator AT&T Wireless Services.
But Takeshi Natsuno, DoCoMo's managing director of i-mode strategy, told Reuters last month he wanted more i-mode partnerships in new European markets with dense populations such as Britain.
Chief Executive Keiji Tachikawa reiterated the company's goals at a regular news conference on Friday.
"We have always said we would sit down at the table with any company in the UK that wants to adopt i-mode in its second-generation network," Tachikawa said.
He added that anyone who knew about Britain's mobile market would realise that the only possible operator in such a case would be mm02.
Still, even that may present challenges, according to one analyst, who declined to be named.
"I-mode is looking very outdated now. Nobody is really interested," the analyst said. "It's not that difficult to replicate so why would you even consider giving any royalties to DoCoMo?"
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Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
