AOL, NTT DoCoMo 'in talks'

New technology will transform mobile use

Japanese mobile phone giant NTT DoCoMo is reportedly in talks with America Online about an alliance targeting the global wireless internet market.

The Japanese financial newspaper, Nihon Keizai Shimbun, said a deal could be signed as early as next month.

The two could prove a powerful alliance, linking DoCoMo's hugely successful i-mode wireless internet technology with AOL's global reach and huge content store.

DoCoMo, market value $260bn, has been in talks with industry operators worldwide, with some alliances - such as that in Europe with Dutch firm KPN and Hong Kong's Hutchison Whampoa - already completed.

It already has more than 8 million customers for its i-mode instant messaging and text-based mobile internet service in Japan, and is to be the first large scale commercial operator of next generation mobile internet services.

Sticking points

These third generation (3G) services will be able to offer high quality content, such as video emails or films, via a mobile phone, with global operators keen to be in a position to take the lion's share of the market.

DoCoMo declined to comment on the Nihon Keizai report on Wednesday.

"When more specific deals are finalised, we will announce them as soon as is possible," DoCoMo said in a statement.

AOL Japan said: "We are not in a position to make a comment."

Some reports suggest that talks have been ongoing for some time, with a number of sticking points to be overcome.

Next generation

These include the geographical scope of a tie-up and the question of what would happen to competing internet service provider operations, such as DoCoMo parent company NTT's OCN dial-up service.

AOL concentrates on fixed line dial-up customers via a personal computer, and is the world's largest internet service provider, with more than 23 million customers.

It has a large stock of content, and a deal with DoCoMo could give it both a leap into the wireless internet market, and the Japanese market as a whole.

DoCoMo has said its strategy is to buy stakes of about 20% in its partners, enough to give it a voice in management over what technology will be used for new services.

DoCoMo's 3G service, using its Wideband Code Division Multiple Access (WCDMA) standard is set to roll out in Japan next May.