DoCoMo Reportedly Planning To Buy Stake In AT&T Wireless

Japanese telco Nippon Telephone & Telegraph's DoCoMo wireless services unit has agreed to buy up to a 20% stake, at a projected value of $9 billion, in AT&T's Wireless Group Inc., according to published reports. The deal would give the domestic carrier a sorely needed cash infusion and would give DoCoMo access to the lucrative U.S. wireless market.

AT&T Wireless Group, which comprises mobile and fixed wireless systems, was created as a tracking stock early this year and will become a standalone business as part of the U.S. carrier's recently revealed plan to split itself into several businesses. The AT&T group has been aggressively marketing wireless data services for businesses and consumers this year and allying with content providers to build service usage.

DoCoMo started its wireless Web service, dubbed I-mode, in February 1999 and has more than 12 million users. I-mode provides access to more than 21,000 Web sites. The company recently inked a pact with America Online to jointly develop a series of unspecified Internet services. The Japanese wireless unit is also looking to expand in the Asia-Pacific Rim area.

"A relationship with a powerful wireless partner like DoCoMo could prove attractive to AT&T Wireless Group Inc. by bringing its vast wireless experience and technology to AT&T," says Daniel Briere, CEO of telecom consulting firm TeleChoice. "But it's really too soon to speculate as to how AT&T's wireless group could put this knowledge to work." The Wall Street Journal reported that the deal could be revealed next week. AT&T Wireless Group declined to comment.