3 may back out of i-Mode partnership

Mind the UK gap

NTT DoCoMo is rumoured to be seeking an alternative UK operator with which to launch its i-Mode data service, because of the problems besetting its planned partner, Hutchison's '3', in which it owns a 20% stake.

Although DoCoMo denied the speculation, sources within '3' said the company is no longer intending to launch i-Mode and wants to stick to its own '3'-branded data services as its weapon to compete with the leading offering, Vodafone Live! KPN of the Netherlands is the most successful European provider of i-Mode.

It has a 15% stake in '3' but recently refused to respond to a cash call to inject a further £150m, leading to a legal battle with DoCoMo. Against this background, it does seem that the logical i-Mode/'3' network is breaking down.

However, it will be hard for DoCoMo to win a major UK carrier to i-Mode since most are well advanced with their own data services and are determined to strengthen their own brand awareness in order to challenge Vodafone's huge branding exercise and its 2m Live! customers. It could adopt the compromise that it has in Spain, where it managed to sign up the leading carrier but only at the cost of Telefónica offering i-Mode under its own brand.

i-mode, which has been highly successful in Japan with 39.5m subscribers so far, has recently been introduced in Spain (by Telefónica Moviles) and Italy (Wind), following the KPN services in Benelux and Germany and France. It has also been adopted by KPN- owned operators in Benelux, Germany, as well as Bouygues in France. Uptake has been slow - about 700,000 across the whole of Europe, but DoCoMo is targeting 1 million by the end of the year, which makes a UK launch important.

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