AT&T Wireless signs pact with NTT DoCoMo

(Telephony) - It's official. AT&T Wireless announced a strategic alliance with Japan's NTT DoCoMo today along with aggressive plans to deploy GSM technology, a move that will help the company enter the high-speed wireless data market more quickly.

DoCoMo will invest about $9.8 billion for AT&T preferred stock, equivalent to 406 million shares of AT&T Wireless tracking stock, a 16-percent interest. In addition, DoCoMo will acquire five-year warrants to purchase an additional 4.17 million shares of AT&T Wireless tracking stock at $35 per share. The tracking stock held by DoCoMo will convert to AT&T Wireless common stock once AT&T spins the company off.

AT&T Wireless plans to create a new, wholly owned subsidiary to develop multimedia applications for its current TDMA network and a GSM-based GPRS network it plans to deploy alongside the TDMA network. Telephony previously reported AT&T Wireless' plans to move to GSM technology (Telephony, Nov. 13, p.12). AT&T also plans to migrate to EDGE technology and eventually to the European UMTS standard. AT&T Wireless said it has enough spectrum to accommodate these plans. The company's previous strategy was to migrate its TDMA network to EDGE technology.

As part of its agreement with DoCoMo, AT&T Wireless plans to license DoCoMo's i-mode technology platform. DoCoMo is considered the most successful wireless data operator in the world, supporting more than 15 million i-mode subscribers in Japan. It has been looking for ways to spur adoption of the service around the world.

"This is all the technology, not just the brand," said John Zeglis, chairman and CEO of AT&T Wireless. "This will be exclusive in North America and no other carrier can have this."

AT&T Wireless said it expects its affiliates in North America, including Canada's Rogers Cantel, to also deploy GSM technology. These affiliates, however, won't have access to the i-mode patents and brand, only AT&T Wireless' Web portal, said Zeglis.