MmO2 is working on a deal to launch a mobile Internet service based on NTT DoCoMo's i-mode in the UK next year. Sources say DoCoMo has turned to mmO2 after 3 failed to roll out a UK version of the i-mode service, whose Japanese version has 42 million subscribers.

MmO2 will introduce a UK i-mode service next year, first on its GPRS handsets, and later on 3G handsets, according to a source close to the negotiations, who declined to be named. DoCoMo will provide mmO2 with data distribution, content development services and other know-how.

I-mode was launched in 1999 and has over 42 million subscribers in Japan, as well as three million outside Japan, in countries including France and Germany. The i-mode service is an easy-to-use package of content, e-mail, games and other applications and services designed for packet-based network technologies, with a format that is nearly identical to regular Web pages.

In official statements, DoCoMo has not mentioned any UK partner, but has said it is studying the possibility of offering i-mode in the UK and is conducting studies about how to do this. However, one analyst said the deal had been completed. "It's a done deal," said Kirk Boodry, telecom analyst with Dresdner Kleinwort Wasserstein (Japan) in Tokyo.

The agreement won't provide DoCoMo with much revenue, but it will extend the company's brand image in Europe, Boodry said. For mmO2, the move will give the carrier an easy route to provide mobile Internet services, taking advantage of DoCoMo's extensive experience with the i-mode technology and software.

"Over the last two or three years, the mobile Internet has been seen as a big opportunity for European carriers," Boodry said. Alternatively, such services are a lifeline since, unless they can persuade users to spend more on data services, carriers face a saturating market and declining revenues as voice services become a commodity.

A deal with mmO2 would be the eleventh i-mode partnership between DoCoMo and a carrier outside of Japan, following deals with Telstra for Australia, Cosmote in Greece, E-Plus Mobilfunk in Germany, KPN Mobile in the Netherlands, Far EasTone in Taiwan, BASE in Belgium, Bouygues in France, Telefonica Móviles in Spain, Wind Telecomunicazioni in Italy and CellCom Israel.

The UK's i-mode service has been held up by an abortive deal with 3. DoCoMo invested a 20 percent stake in Hutchison 3G UK in 2000, but sold the stake back to Hutchison Whampoa in May. Hutchison had failed to roll out the service on the 3 network, while, other UK-based carriers have been rolling out rival mobile Internet services.