DoCoMo looks to Europe for potential growth

NTT DoCoMo Inc is turning to Europe as the market with the greatest potential to expand its most popular Internet service because carriers there are more likely to embrace it than those in Asia, a DoCoMo executive said.

"I see more potential in Europe," said Takeshi Natsuno, general manager of strategy for i-mode, which offers cellphone users online shopping and entertainment. "European carriers are trying to distinguish themselves by providing unique services." I-mode subscribers in Europe will probably top 1 million by the end of next year, compared with about 100,000 at the end of August, Natsuno said in an interview. Japan's largest mobile-phone operator has attracted 35.5 million i-mode users, or one third of Japan's population, in less than four years of service.

DoCoMo betting on speedy acceptance for i-mode in Europe, where an earlier mobile Internet technology called Wireless Application Protocol, or WAP, failed to take off with users.

The company has invested about Japanese Yen 1.9 trillion (US$15 billion) abroad in foreign carriers such as KPN Mobile NV of the Netherlands to promote use of i-mode, as well as a standard it helped develop for high-speed wireless Internet access that will be started in Europe over the next two years.

DoCoMo began offering international i-mode services in March.

I-mode available through KPN Mobile, its units E-Plus Mobilefunk GMBH in Germany, BASE in Belgium, KG Telecommunications in Taiwan and Bouygues Telecommunications in France.

Next the company will license i-mode-related technology to Telefonica Moviles SA, Spain's largest mobile-phone company.

The agreement is the second in which DoCoMo is providing technology available to a foreign partner without buying a stake.

Europe more lucrative because carriers there have already boosted revenues by providing services that allow cellphone subscribers to play games and read newspapers on the move, DoCoMo's Natsuno said.

In October, DoCoMo rival Vodafone Group Plc, the world's largest mobile-phone company, began a service similar to DoCoMo's i-mode that allows users to send pictures and play games under the Vodafone Live brand.

Rather hurting DoCoMo's chances in Europe, Live may actually help the Japanese phone carrier by introducing Web-based phone services to a larger audience, Natsuno said.

Live be a plus for us because the more people that recognize the fun elements of the service, the easier we can sell the i-mode concept," Natsuno said.

"We have the odds in our favor" because Vodafone can't team up with its rival carriers in Europe without taking an equity stake, he added. Natsuno is in Hong Kong, attending ITU Telecom Asia 2002, an industry gathering.

Investors, already disappointed with DoCoMo's global strategy after the company wrote off more than half of its investments in carries such as AT&T Wireless Services Inc, are less enthusiastic about DoCoMo's chances in Europe or elsewhere.

DoCoMo's have tumbled 18 percent since the beginning of the year, the second-worst performer on the six-member Topix Communications Index.