MmO2 and DoCoMo Tie the Knot - Official
November 30, 2004 - source: BWCS
As predicted UK mobile operator mmO2 has signed a deal with NTT DoCoMo of Japan to offer i-mode services in Britain. The terms of the agreement will allow the former mobile wing of BT to offer i-mode services to its British, Irish and German customers, some 22 million in all.
For the British operator the deal provides a chance to boost its average revenue per user (ARPU) figures, while for the Japanese it offers a chance to finally attain their long cherished foothold in the UK market. In May of this year DoCoMo's top brass decided to sell the company's 20% stake in UK mobile operator 3, after the Hutchison-backed outfit refused to launch i-mode services.
The Japanese operator has yet to replicate the domestic success of its i-mode services, which have 42 million users in Japan. In the other markets where the service is being co-marketed i-mode has managed to amass only some 2 million users. European operators which have signed up to distribute it, hope that the low cost of data and the 84,000 internet sites with i-mode content will help boost revenues from mobile data services and empower them to compete more effectively with Vodafone L!ve services.
According to mmO2 CEO, Peter Erskine, "We have conducted a thorough evaluation of the opportunities offered by licensing this technology. Of particular significance is the ARPU increase experienced by other i-mode licencees."
One of the presumed problems for the mmO2 deal is the fact that DoCoMo already has a partner in Germany. The UK company will also now be able to sell i-mode services there. However, the possibility of any conflict was quickly brushed aside by Erskine. The CEO said he believes that his company will sell i-mode capable phones but not use the Japanese brand in Germany and that this should placate DoCoMo's current German partner KPN. According to Erskine, "Our deal is with DoCoMo ... and I would assume that they would have done whatever they have to do to ensure they comply with their KPN agreement."
Reports on Reuters today suggested that DoCoMo has confirmed that it will continue to offer i-mode services via KPN in Germany as well as mmO2.
The UK operator said it expects that it will launch i-mode phones in the UK and Ireland by this time next year. It plans to follow this up with a non-branded launch in Germany in mid-2006. The company believes that i-mode will help boost ARPU by euros 4 - 6 a month.
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