mmO2 gets into bed with Japanese giant for i-mode deal

mmO2 has announced it's signed with NTT DoCoMo to offer the Japanese giant's i-mode mobile internet service on its network.

The operator will make i-mode available to its 22 million customers in the UK, Germany and Ireland using 2/2.5G and 3G handsets. Users will be able to access games, online shopping, messaging services, downloads and content updates through the platform, which is already used by 45 million people worldwide.

mmO2 is hoping that the new addition to its portfolio will drive the all-important ARPU - average revenue per user.

Peter Erskine, mmO2's CEO, said the operator had taken into account the rise in ARPU that other licensees in Europe had experienced before it decided to get into bed with DoCoMo.

mmO2 has said it plans to introduce the service in the UK and Ireland in the second half of 2005, with the German launch to follow in spring 2006.

When the UK service goes live, it will sit side by side with mmO2's home-grown content portal, O2 Active, which, according to the mobile company, has three million users.

Eden Zoller, principal analyst at research firm Ovum, said the move could end up as a double-edged sword for mmO2.

For mmO2, "It's cheaper to build up a cutting-edge portfolio is cheaper through i-mode than it is through O2 Active... [which] does lag behind in several key areas such as video," Zoller said. "It's a good strategic move."

However, she added that with i-mode and O2 Active both competing side by side for consumers' attention and cash, it may be O2 Active that loses out.

"It's a very tricky balancing act," she said. "If O2 Active isn't working hard - I wonder if it might disappear over time."