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Japan's NTT DoCoMo is being hailed as the ideal partner for Hutchison Telephone, Hutchison Whampoa's joint venture with United States-based Motorola.

 The cellular operator is often described by analysts as being high in subscriber numbers but low in earnings and quality.

  NTT DoCoMo, which has agreed to pay $3.18 billion for a 19 per cent stake in Hutchison Telephone, plans to introduce technology to make the company with Hong Kong's largest base of mobile-telephone subscribers more competitive.

  NTT DoCoMo, which is the world's largest mobile-phone operator, has the most advanced network of third-generation technology that will bring applications such as Internet, e-mail and video-conferencing to handsets.

  Hutchison Telephone may boast it has 1.3 million mobile subscribers, but analysts point out many of them were attracted by heavily subsidised tariffs and through free handset offers.

 The company badly needed the technical expertise a partner such as NTT DoCoMo could give in order to upgrade services in preparation for the eventual launch of third-generation services in Hong Kong, analysts said.

 'Hutchison's network in Hong Kong is just appalling,' an analyst said.

 'To bring a company like NTT DoCoMo is very clever. It's a class act.'  NTT DoCoMo plans to use software and applications for its i-Mode mobile-telephone service - available only in Japan - for Hutchison Telecom's network.

 This service enables the mobile use of such applications as telephone banking, airline reservations, stock transactions, e-mail and Internet access.

 Nomura Securities analyst Vikas Sharma said i-Mode's content was at present 'Japanese-centric', although 'there are some applications that you can use anywhere in the world'.

 'All you need is to change the language,' he said.

 While the transaction will give Hutchison Telephone advanced technology, NTT DoCoMo's parent - Nippon Telegraph & Telephone (NTT) - will gain by expanding its foothold in Asia.

 NTT has earmarked 150 billion yen (about HK$11.4 billion) for overseas investments, with the Hutchison Telephone stake its first move in the region.

 Moreover, NTT DoCoMo aspires to be a global operator in the same league as giants AT&T, say analysts.

 NTT DoCoMo views the Hong Kong market as 'very attractive' because 50 per cent of Hong Kong's population uses mobile telephones, managing director Kiyoyuki Tsujimura said.

 'To introduce data, the maturity of the market is very important.'  Goldman Sachs, which advises Hutchison Whampoa on telecommunications transactions, had approached NTT DoCoMo, said Timothy Dattels, head of Asian investment banking at the company.

 'We thought about who would be the most ideal partner,' he said. 'NTT DoCoMo is definitely the leader in third-generation technology.'  Negotiations with NTT DoCoMo spanned several months. The final agreement price valued each Hutchison Telephone mobile subscriber at US$2,100.

 In April, British Telecom paid the equivalent of $3,200 a subscriber for a 20 per cent stake in SmarTone Communications.

 However, 'the transaction value is not the most important part,' Mr Dattels said.

 'Partnership is.' TELECOMS 



Hutchison-DoCoMo deal hailed