NTT DoCoMo's $6bn US 3G bet

Starting on Tuesday, AT&T Wireless has exactly two years to roll out NTT DoCoMo's new wireless network on a revised schedule, and $6.2bn in AT&T Wireless stock says it will be on time.

That's the gist of an amendment filed to the US Securities and Exchange Commission (SEC) putting teeth into the requirement that AT&T Wireless will launch at least 1,000 cell sites in San Francisco, Seattle, Dallas and San Diego using a new wireless technology by 31 December 2004.

NTT DoCoMo, Japan's largest mobile operator, invested the money in January 2001 as part of a long-term agreement with AT&T Wireless to roll out 3G mobile services in the US. The deal, signed in December 2000, stipulates that the companies would launch W-CDMA-based services in 13 of the top 50 wireless markets by 30 June, 2004.

According to the DoCoMo filing on Thursday, AT&T Wireless is on the hook to meet the new launch deadline or it will have to buy back its own stock from DoCoMo for the original purchase price plus interest.

"There is very, very little chance of that happening," said Mark Siegel, an AT&T Wireless representative. "We have a strong partnership with DoCoMo. We are absolutely committed to rolling out W-CDMA, and this agreement is simply recalibration of the schedule of that rollout. That's all we're talking about."

The amendment makes an exception if AT&T Wireless misses the deadline for reasons beyond its control, or if it switches its rollout plans to "an alternative third-generation technology".

AT&T Wireless's share of the NTT DoCoMo investment was $6.2bn, according to the filing. AT&T retained $3.7bn.

The planned launch will be "the first deployment of true 3G wireless data services based on W-CDMA technology in North America", according to NTT DoCoMo.

Another amendment to the deal grants AT&T Wireless the right to swap cities, should current plans not pan out. Dallas could be replaced by Miami or Detroit, while San Diego could be replaced by either one of those two cities, Phoenix or Houston.

Paul Festa writes for CNET News.com.