America Online Inc. and NTT DoCoMo Inc. announced Wednesday in Tokyo that they will form a strategic alliance to integrate their wireless and fixed-line Internet services, with NTT DoCoMo becoming AOL Japan’s top shareholder.
The two companies will develop next-generation technologies to merge cellular-based and personal computer-based Internet services, with the aim of offering them worldwide, the companies said.
The first test case will be the Japanese market, which has more than 55 million cellphone users, 11.09 million of whom subscribe to DoCoMo’s i-mode, the world’s first Internet-browsing and e-mail service based on mobile phones.
DoCoMo will pay 10.3 billion yen to acquire 42.3 percent of AOL Japan, which began services in 1997.
“If we succeed in Japan, we want to jointly develop the business overseas,” said DoCoMo President Keiji Tachikawa at a joint news conference in Tokyo with AOL representatives.
The two companies did not go into the details of the technologies they hope to develop, but they did give two examples: real-time participation in online auctions and a service that allows cellphone users to view attached files on a PC connected to AOL.
The new technologies will make it convenient and easier for consumers to “access interactive contents in the future anywhere, anytime and in any way they choose,” said Michael Lynton, president of AOL International.
As a first step, DoCoMo will make AOL its “preferred Internet service provider,” while adding AOL Mail and AOL Instant Messenger to its i-mode service, the two companies said.
DoCoMo’s focus appears to be on global markets, rather than the Japanese market, because AOL Japan remains a minor player after three years operating in Japan.
AOL Japan has attracted 450,000 subscribers in that time. However, that number is way behind Fujitsu Ltd.’s @nifty, with 3.82 million subscribers, and NEC Corp.’s Biglobe, which had 3.14 million customers as of the end of June.
AOL Japan was established in 1996, with America Online holding a 50 percent stake, Mitsui & Co. controlling 38 percent and Nihon Keizai Shimbun Inc. with 12 percent.
After DoCoMo jumps in, the ownership ratios of the three will become 40.3 percent, 13.224 percent and 4.176 percent, respectively.
For America Online Inc., the Japanese market is expected to be a test case for wireless multimedia services, as Japan is at present the only country with successful cellphone-based Internet services.
Under the agreement, the two companies will establish a strategic planning and operations committee and study the feasibility of overseas business with new technologies.
An investment committee will also be set up to study joint investment in venture businesses that have technologies useful in integrating mobile and fixed-line systems, the two firms said.
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