TOKYO (05/29/2000) - Fresh from announcing it will take a stake in a major Dutch cellular carrier, Japan's NTT DoCoMo Inc. has entered into talks with South Korea's SK Telecom Co. Ltd. regarding an investment in that company.
"We are talking with NTT DoCoMo, but we haven't decided anything yet," said Chul Kuen Kwon, a spokesman for SK Telecom. A spokeswoman for NTT DoCoMo declined to comment.
The talks with NTT DoCoMo began about two weeks ago, said Kwon -- just days after the company agreed to pay 5 billion euros (US$4.5 billion) for a 15 percent stake in Holland's KPN Mobile NV -- but NTT DoCoMo and SK Telecom are old partners. They have been working together for more than two years and are currently jointly testing third-generation cellular technology in South Korea.
NTT DoCoMo, which enjoys a 58 percent share of the domestic cellular market and has almost 7 million subscribers to its I-mode wireless Internet service, kicked off an international drive in late 1999 when it inked a deal to take a 19 percent stake in Hong Kong's Hutchison Telephone Co. Ltd.
The deal not only marked the company's first move overseas but also confirmed the carrier's intention, disclosed by company President Keiji Tachikawa at the Telecom 99 trade show in Geneva last October, to begin expanding outside of Japan.
The Japanese carrier is eyeing the launch of third-generation cellular services, which will enable data transmission at speeds as high as 2M bits per second, as an opportunity to move outside of Japan. The company hopes the large investment needed to build new networks will make overseas carriers more open to foreign equity stakes, Tachikawa said in an interview at Telecom 99.
In addition to enabling it to broaden its reach outside Japan, Tachikawa said the stakes will also enable it to influence the decision over which of two competing third-generation formats are adopted. NTT DoCoMo led development in Wideband CDMA (Code Division Multiple Access) technology and intends to launch a network based on the format in Japan in May 2001. By pushing the format overseas, the carrier will make sure that international roaming services are possible.
NTT, in Tokyo, can be reached online at http://www.ntt.com. SK Telecom can be reached online at http://www.sktelecom.co.kr.