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O2 to bring i-mode to UK in 2005

Anticipated NTT DoCoMo deal signed

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European mobile operator mmO2 today confirmed its decision to license and roll-out NTT DoCoMo's i-mode technology in a bid to boost the money it makes from each of its 22m customers.

The financial terms underpinning the "long-term strategic alliance" between the two companies were not disclosed.

mmO2 said it will pitch the service at its existing GSM/GPRS and 3G customers as an more feature-rich extension of its WAP-based O2 Active data service. While mmO2's O2-branded operations in the UK, Ireland and Germany, and the services it offers under other names, together have a user base of around 22m customers, O2 Active has just 3m users.

By an interesting coincidence, 3m is also the number of i-mode subscribers already active in Europe, so if mmO2 can get a big chunk of its 22m customers using i-mode, it's a win not only for the European network but for DoCoMo's plan to grow the number of i-mode users worldwide. The global total currently stands at 45m users, most of them in DoCoMo's native Japan. mmO2 is DoCoMo's eleventh international signing.

mmO2's interest in the technology arised from its need to increase its ARPU (Average Revenue Per User) figure, a crucial measure of mobile network success now that most markets are saturated and new customers thin on the ground. The network claims that its 3m O2 Active users account for a market share-defying half of the UK's mobile phone Internet access. That's no mean feat given the UK market's general scepticism about WAP, and puts mmO2 in a strong position to get its already Internet-keen user base to upgrade to flashier but more expensive services. Today, almost 22 per cent of the company's revenue derives from data services, it said.

The new service will be rolled out in the UK and Ireland during the second half of 2005, mmO2 said, under the i-mode brand. The German version will launch in the Spring of 2006, under O2 Germany's Genion HomeZone brand. The extra time, mmO2 said, required for the German launch would be taken up unifying i-mode and HomeZone.

mmO2 named NEC, Panasonic, Siemens, Motorola and Samsung as key i-mode handset manufacturers, so it's likely these vendors will provide the bulk of the phones the network will offer through its own 800-strong chain of UK, Irish and German retail sites and via independent retailers. ®

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