British-based cell phone group mmO2 Plc and Japanese operator NTT DoCoMo Inc signed a deal on Tuesday allowing mmO2 to launch an i-mode Internet service in Britain, Germany and Ireland. The pact is expected to help boost mm02's revenue and allow DoCoMo, Japan's largest mobile firm, to fulfill a long-held ambition of bringing its i-mode technology to the key UK market, six months after selling its stake in British video phone pioneer 3 UK.
It will also give DoCoMo a larger presence in the German mobile market, although the deal raises questions about a rival marketing agreement it has with Dutch telecoms carrier KPN that spans the Netherlands, Belgium and Germany.
DoCoMo's five-year-old i-mode gives an always-on Internet service that allows users to send e-mail, chat, play games, download ring tones and access content.
MmO2 said the deal underlined its commitment to boosting revenues from mobile data services by offering phones it described as simple to use, fast and intuitive, thereby challenging rival multimedia services such as market leader Vodafone Group Plc's Vodafone live! handsets.
KPN, which was the first European operator to roll out i-mode two years ago, indicated it was not ready to welcome another provider of the service in Germany, Europe's largest market, but added it was in talks with DoCoMo.
"The situation is that KPN has an exclusive licence until 2013. This is a jigsaw piece that doesn't fit and we are in talks with DoCoMo to solve this puzzle," said a KPN spokesman. He declined to say whether KPN was considering a legal challenge in Germany.
In the wake of Reuters reports of an imminent deal between DoCoMo and mmO2, which has 22 million customers in Britain, Germany and Ireland, the chief executive of KPN said on Monday his deal with DoCoMo was exclusive and good for 10 years.
But mmO2 Chief Executive Peter Erskine said he assumed the agreement, under which mmO2 will sell phones using i-mode's technology but not its brand in Germany, would be enough to appease the Dutch operator.
"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)," Erskine told Reuters in London.
A DoCoMo spokeswoman said the firm planned to offer i-mode in Germany through both mm02 and KPN.