European I-mode joint venture nixed –

Dutch cell phone operator KPN Mobile NV and its Japanese partner NTT DoCoMo Inc. have, for now, abandoned plans to form a joint venture company for a European version of the I-mode mobile Internet services popular in Japan, KPN said Wednesday.

Instead, KPN licensed the I-mode technology for its Dutch and Belgian networks and plans to do so for its German subsidiary. Abandoning the joint venture was necessary to avoid further delay of the launch of I-mode in Europe, KPN said.

"A licensing agreement is much less complex, we prefer it because of the speed," said KPN spokesman Marinus Potman, adding that a joint venture is not ruled out in the future.

Launch of the European version of I-mode is now planned for late in the first quarter or sometime in the second quarter of next year in Germany as well as the Netherlands, with Belgium following after about two months. That means a slight delay, Potman admitted.

"We said we would launch late this year or early next year. Now it will be in spring of next year," he said.

KPN and NTT DoCoMo ran into practical problems with the setup of the centralized joint venture for the European I-mode platform, according to Potman. The joint company was to be responsible for server operation, operation of the main menu and portal services and development of a pan-European brand.

"We discovered that organizing content for the services is a local affair. Each operator will manage its own I-mode service," said Potman.

The joint venture, first announced in January, was supposed to be established in March and also included Italy's Telecom Italia Mobile SpA (TIM) as a partner. KPN was to own 75 percent of the equity with a US$90 million investment. NTT planned to invest $50 million and would hold the remaining shares.

Abandoning the joint venture brings some savings for debt-laden KPN, Potman said.

"Part of the amount reserved for the joint venture will go into the current (I-mode) investment, but this (licensing) is cheaper in the long run, provided the joint venture isn't established later," he said.

Under the licensing agreement, valid until 2012, NTT DoCoMo will provide intellectual property rights, service know-how and technologies to offer I-mode on European GSM (Global System for Mobile communications) networks with a GPRS (General Packet Radio Service) add-on, and later on 3G (third-generation) networks, NTT DoCoMo said in a statement.

KPN has ordered 50,000 handsets tailor-made for the European I-mode service from an unnamed Japanese manufacturer. These handsets have two browsers, to support WAP (Wireless Application Protocol) and I-mode compatible HTML (HyperText Markup Language). Users will have to buy a new handset to use the European I-mode.

KPN has said it expects I-mode to become the "main driver" behind its mobile data revenue, even though the 50,000 handsets would only service about 1 percent of its 5.1 million customers.

Initial I-mode services on the networks of KPN Mobile and its German subsidiary E-Plus Mobilfunk GmbH & Co. will include stock quotes, ticket reservations, games and restaurant guides, according to NTT DoCoMo.

NTT DoCoMo, in Tokyo, can be contacted at +81-3-5563-7015 or found online at KPN Mobile NV in The Hague, Netherlands can be reached at +31-70-332-5304, or on the Web at

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