NEC Bags Euro I-Mode Deal

NEC Corp. (Nasdaq: NIPNY) has won the contract to supply Bouygues Telecom with the servers and software the French mobile operator needs to launch i-mode services on its GPRS network by next April (see Bouygues Wants I-Mode). The vendor is also chomping at the bit to win a cut of the handset action.

Financial details of the platform deal, won by NEC's French subsidiary, were not disclosed. "I wish I could tell you -- it is significant for us, and we will deliver to Bouygues within the next few months," NEC spokesman Kazuya Yoshida tells Unstrung. "What is more significant for us is that we have been chosen to deliver the platform. This gives us the chance to win more deals as operators decide to launch i-mode services."

Not that European carriers are queuing up to join KPN Mobile and its German wireless subsidiary E-Plus Mobilfunk GmbH in providing a Euro version of the services made world famous by Japanese operator NTT DoCoMo Inc. (NYSE: DCM). KPN and E-Plus launched earlier this year (see I-Mode Use Doubles in Europe), and KPN's Belgium mobile business, BASE, plans to start commercial services this month. Each operator has to sign a license with DoCoMo before it can develop and launch services under the i-mode name, and so far no other European carriers have agreed to such a deal, though Telecom Italia Mobile SpA (Milan: TIM) and Hutchison 3G UK Ltd. are believed to have shown interest.

Analysts believe the provision of such broad mobile data services is important for carriers in gaining experience with non-voice (and non-SMS) services. Ovum Ltd. analyst Cristiano Stillati says i-mode gives service providers, content developers, and customers invaluable practice with those new services that will help pave the way for 3G.

Operator uptake is still very low, but DoCoMo has set up a special business unit designed to persuade Europe's GSM carriers of the benefits of adopting i-mode as part of their services strategy (see DoCoMo Opens London HQ).

NEC is ready to pounce, though, should any more carriers seek to gain experience delivering and marketing mobile data services prior to the launch of 3G services, and the vendor is anxious to supply handsets as well as its platform. "We haven't signed a contract with Bouygues for handsets, but we hope to," says Yoshida. "It is still early in the process, and they haven't decided on that yet."

Toshiba Corp. and Mitsubishi Electric Corp. will likely be knocking on Bouygues's door for a handset deal as well. A Toshiba spokesman said that although there was no commercial relationship with the French operator just yet, the company was "certainly hopeful" of a deal. NEC and Toshiba already supply i-mode handsets to KPN Mobile and its subsidiaries.

Bouygues will be looking for the delivery of the specialist phones as soon as possible, as the carrier wants to launch services before its self-imposed deadline of April 2003. "We hope to launch before April, but I could not say if it will be before the end of 2002," says a spokeswoman for the operator, which is still waiting to hear from the French regulator, Autorité de régulation des télécommunications (ART), on whether it has been successful in its bid for France's third 3G license. The regulator is due to let Bouygues know its decision before the end of September.

Bouygues needs something new to help boost its market share. With about 6.2 million customers (16.4 percent of the market), it is a long way behind the number two operator SFR (about 13 million subs, 34.4 percent market share) and streets behind Orange France, which boasts about 18.6 million customers (49.3 percent). Orange and SFR already have 3G licenses.

— Ray Le Maistre, European Editor, Unstrung
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