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Tue, Jul 31, 2007 - Page 10 News List

KDDI to offer cellphone subscribers e-mail service

BLOOMBERG

KDDI Corp, Japan's second-biggest mobile-phone operator, will offer an e-mail service based on Google Inc's Gmail, expanding an existing alliance to win customers in the nation's US$75 billion wireless market.

The service with Google, the world's most popular search engine, will be available in September for free, Tokyo-based KDDI said.

Users will get 2 gigabytes of storage and an "@auone.jp" e-mail address, Makoto Takahashi, KDDI's associate senior vice president, said at a briefing in Tokyo yesterday.

FALLING NUMBERS

KDDI plans to lure users after gaining fewer subscribers than smaller operator Softbank Corp for the second straight month in last month.

Since last year, the company's mobile-phone handsets have offered Mountain View, California-based Google's search box, which shows results and advertisements related to users' keywords.

"Mobile phones become a mainstream method to access the Internet," Takahashi said. "We aim to gain a significant number of customers as this service has a big impact."

EASY ACCESS

Subscribers to the service can access their e-mail with their handset and personal computer. KDDI will add a notification function at a later date that alerts users when they receive a new e-mail, Takahashi said.

He, however, did not specify a timeframe.

KDDI president Tadashi Onodera said on Jan. 25 that advertising revenue rose after the company introduced Google's search. Takahashi declined yesterday to comment on how the new service will contribute to KDDI's earnings.

Shares of KDDI fell 2.1 percent to ?793,000 (US$6,690) at the close on the Tokyo Stock Exchange, the lowest price since Jan. 11.

Market leader NTT DoCoMo Inc said on Friday that it would reduce monthly charges by 50 percent for those who sign on for two years, expanding its discount offers to rival KDDI.

PRICE WAR

"The price war between DoCoMo and KDDI, which has been a concern of ours for some time, is starting to look like a mud wrestling match," Hitoshi Hayakawa, a Tokyo-based analyst at Credit Suisse Group, wrote in a report dated last Friday.

The battle makes "it harder to justify purchase of the shares," he wrote.

Hayakawa has a "neutral" rating on KDDI and rates DoCoMo shares "outperform."

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