DoCoMo to boost stake in KG Telecommunications

NTT DoCoMo Inc said yesterday it would raise its stake in Taiwan's third biggest mobile operator, reflecting a fresh push in Asia by the Japanese giant after big investments in the US and Europe last year.

DoCoMo, Japan's largest mobile telecommunications carrier, said it would purchase up to Y6.92 billion (US$56.3 million) in new shares in KG Telecommunications Co Ltd (遠傳電信), paving the way to bring DoCoMo's latest mobile phone technology to Taiwan.

DoCoMo already owns 20 percent of KG Telecom, a mobile unit in the Koo's Group (和信集團) -- one of Taiwan's biggest family controlled corporate entities. The latest purchase will be made by the end of June, DoCoMo said.

KG Telecom aims to launch a service modelled on DoCoMo's popular Internet-enabled "i-mode" phones by mid-2002, using DoCoMo technology under a licensing agreement.

KG Telecom is expected to be Taiwan's first operator to roll out GPRS (general packet radio services) for mobile online services, and is known to be seeking a license for 3G technology to allow fast transmission of music and video over cellphones.

"The increased investment will pave the way for the early deployment of i-mode-like and third generation wireless services in Taiwan," DoCoMo said in a statement.

DoCoMo's i-mode phones have been a huge hit in Japan, where more than 24 million users surf the Web on business card-sized screens. But it has recently come under pressure after two rivals this month announced tie-ups with Chinese carriers.

Shares in DoCoMo closed down 3.4 percent at 1.99 million on Monday

DoCoMo spent ?1.8 trillion last year buying stakes in wireless carriers in Asia, Europe and the US, and last month said it would boost its stake in Hong Kong's Hutchison Telephone, a unit of Hutchison Whampoa Ltd to 25.4 percent from 19 percent.

Under the latest partnership, DoCoMo gets to seat two people on KG Telecom's board and will offer know-how on managing mobile Web sites and servers, and for developing content, DoCoMo said. KG Telecom currently has 3.84 million subscribers.

DoCoMo said it could not estimate how much the purchase would end up adding to its current 20 percent holding. It planned to buy the shares at a price of NT$30 each by the end of June.

Last November, DoCoMo announced plans to buy 20 percent of unlisted KG Telecom for NT$17.089 billion (US$497 million), or NT$55 per share for a total of 310.7 million shares.

DoCoMo, however, is not the only Japanese carrier pushing hard into Asia.

Japan Telecom Co Ltd said last month it would collaborate on fixed-line business with China Telecommunications Corp, China's dominant state carrier.