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DoCoMo inks KG Telecom deal

Leslie Koo, left, chairman of Taiwan's KG Telecom, yesterday signed a strategic partnership with Norioki Morinaga, senior vice president of NTT DoCoMo, Japan's largest mobile telecommunications company, to provide 3G mobile Internet services in Taiwan. PHOTO: CHEN CHENG-CHANG, TAIPEI TIMES

Two weeks of speculation ended yesterday when KG Telecom (和信電訊) signed a strategic partnership with NTT DoCoMo to provide 3G mobile Internet services similar to Japan's popular i-mode to Taiwanese consumers. The companies also left open the option of a China market alliance.

NTT DoCoMo, Japan's largest mobile telecommunications company, backed the partnership by taking a 20 percent stake in KG Telecom for NT$17.1 billion (US$517 million). The company paid NT$55 per share for nearly 311 million stock shares.

According to analysts, the deal gives KG Telecom a credible foreign partner to work with both in obtaining a 3G license from the government and for building a high-powered mobile Internet network across the nation. KG Telecom officials hope Taiwanese consumers will embrace i-mode mobile Internet services from the Japanese company with the same enthusiasm as they took to Hello Kitty.

"This partnership will bring the world's best mobile broadband Internet service to Taiwan," said Leslie Koo (辜成允), chairman of KG Telecom.

The partnership with NTT DoCoMo puts KG Telecom in a strong position to compete in 3G wireless Internet services in Taiwan -- and both companies have an eye on the China market.

KG Telecom has always planned to take its services to China, Koo said. Since Taiwan produces the most Chinese language Internet content in the world, the nation is a great place to experiment on which Chinese mobile-Internet sites Web sites might fit the culture best.

Although both Koo and NTT DoCoMo senior vice president Norioki Morinaga said yesterday's agreement only covered the Taiwan market, Morinaga said his company would "probably speak to KG Telecom first" before entering China.

The company so far only has two cooperative agreements in Asia, with Hutchison Telephone in Hong Kong and now in Taiwan -- both parts of `Greater China.' With its potentially huge market -- already estimated at 60 million mobile phone subscribers -- China holds strong potential.

In Taiwan, NTT DoCoMo sees high potential for its i-mode services among the 15 million mobile phone users here. The company already holds a commanding lead in its home Japanese market, with 33 million mobile phone customers -- of whom nearly half have signed up for i-mode. These consumers receive services from 722 partner Web sites and over 30,000 other Web sites designed for use with i-mode phones.

The company says it will have W-CDMA service -- very fast, high speed 3G mobile Internet -- up and running in Japan sometime in 2001. Since the agreement between NTT DoCoMo and KG Telecom includes technology, the two could bring the first 3G network to Taiwan. KG Telecom is the first mobile phone service provider throughout Asia to open second generation GPRS mobile Internet service.

In related news, NTT DoCoMo announced yesterday it purchased a 16 percent share of AT&T Wireless for US$9.8 billion, enabling the company to move into the US market as well.

With 3.05 million subscribers as of mid-October, KG Telecom made net profit of US$46.6 million on revenue of US$422.6 million last year.
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