NTT DoCoMo Eyes Stake in AT&T Wireless

NTT DoCoMo Inc. of Japan, regarded as the word's most successful provider of mobile data services, has entered the final stages of talks to acquire a stake in AT&T Wireless, a company official told the IDG News Service.

The official didn't provide any financial details, but press reports in Tokyo and London said the company wants to buy a 15 percent stake in AT&T Wireless valued at about US$9.1 billion. AT&T Corp. plans to spin off AT&T Wireless as part of a restructuring plan announced earlier this fall.

Alan Reiter, an analyst at Wireless Internet & Mobile Computing in Chevy Chase, Maryland, called NTT DoCoMo "the most successful wireless data operator in the world, and it wants to leverage that expertise with international expansion." Reiter said NTT DoCoMo has built up a base of 15 million customers who are ardent users of the company's I-Mode mobile packet data service and wants to launch a similar service in the U.S. That follows multibillion-dollar investments earlier this year in mobile carriers in the Netherlands and the U.K.

Besides nationwide coverage for its existing voice and narrow-band data services, AT&T Wireless has another important asset that has attracted NTT DoCoMo: The company has so much spectrum in the U.S. that AT&T officials told Computerworld in April that the company didn't need to bid for additional frequencies to support the rollout of wide-band data services.

In order to capitalize on that spectrum, Reiter said, AT&T needs to abandon its current wireless technology, Time Division Multiple Access, and switch to Code Division Multiple Access (CDMA), which he said better supports high wireless data rates. That would dovetail with NTT DoCoMo's plans, company sources said, as the company wants to deploy wide-band CDMA services to support high-speed data. Sprint PCS in Kansas City, Mo., is a nationwide carrier using CDMA technology. It has said it can support data speeds in the next two years up to 384K bit/sec without acquiring any additional spectrum.

Officials of both AT&T and NTT DoCoMo issued terse "no comments" on reports of the partnership. Press reports said the deal should be concluded within a week.

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