I-mode handsets to be tailor-made for Europe

KPN Mobile NV has ordered special handsets from an Asian manufacturer to support its European rollout of I-mode technology, slated for later this year or early next year, KPN said Thursday.

The handsets will allow access to data services based on NTT DoCoMo Inc.'s proprietary I-mode protocol, delivered over European GSM (Global System for Mobile Communications) and GPRS (General Packet Radio Service) cell phone networks. Until now, I-mode services have only been accessible using PDC (Personal Digital Communications) cell phone networks in Japan.

The order marks a shift in the European mobile telephony sphere to what is called the Japanese model. Operators take control over what handsets are developed and sold, instead of selling whatever device a handset maker comes out with. KPN has gone to a manufacturer with specific wishes for a line of mobile handsets, a model common for Japanese operators including KPN partner NTT DoCoMo Inc.

"We need to end the dependence on (handset) manufacturers. By being on top of the manufacturer we know exactly what will be delivered and when it will be delivered. We have placed an order for (European) I-mode phones and are already testing units," said Mark de Jong, executive vice president of corporate development and a member of the board of KPN Mobile, in an interview. He declined to name the manufacturer or specify the number of handsets ordered.

By special ordering phones KPN is not only assuring itself of handset availability, but is also ensuring that the handsets will work with the European version of I-mode. Handset availability has proven to be a problem in the past with the launch of new services such as WAP (Wireless Application Protocol) and GPRS.

"The Japanese model is a very good model in this new world of mobile data communications. The cooperation between a manufacturer of handsets and the operator who manages the platform is much more complex," De Jong said.

However, tailor-made phones could prove to be more expensive for the end user, cautioned Peter Richardson, vice president of research at U.S. technology investment bank SoundView Technology Corp.

"If a manufacturer is forced to develop a product for only one particular customer it is much more difficult to amortize the investment cost," he said.

Branding presents another hurdle for KPN, Richardson said. Handsets carrying Asian brand names aren't popular at all in Europe, especially among the target group for I-mode: young and trendy mobile phone users. Nokia Corp. of Finland reigns in Europe with a market share of more than 30 percent.

"European operators haven't been able develop that kind of brand profile that Nokia has. Operators have been very poor in developing customer relationship," said Richardson, who is based in London.

KPN Mobile, its affiliated carriers E-Plus GmbH in Germany and KPN Orange Belgium NV/SA, together with Telecom Italia Mobile SpA (TIM), are preparing to launch a European version of the I-mode service. Work on the service is done in Düsseldorf, Germany, together with DoCoMo, the inventor of I-mode.

The I-mode service will be offered exclusively by KPN, its affiliates and TIM, according to KPN. The European I-mode handset will support WAP and GPRS and will work on the networks of other operators, KPN said. In Japan switching operators also means buying a new handset.

Introduction of I-mode services in Europe will be phased, De Jong said.

"First we will launch in Germany or the Netherlands. Belgium will follow later because the GPRS network isn't finished and because we have to rebrand KPN Orange Belgium. It has always been the plan that TIM will follow after we launch," he said.

As with the Japanese I-mode service, the European service will be presented as a mass-market service, KPN said, declining to specify the type of services that will be offered. As of Aug. 19 there were 26.6 million I-mode users, NTT DoCoMo said. The service was introduced in Japan in February 1999.

It is still unclear when the I-mode service will be launched in Europe. Both KPN and NTT DoCoMo maintain that work on the European service is on schedule. The introduction should take place before the end of this year or early next year.

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