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DoCoMo and KT Freetel to invest $200m

NEW YORK — NTT DoCoMo Inc., Japan’s largest mobile-phone operator, and South Korea’s KT Freetel Co. will pay $200 million for a stake in Malaysian wireless carrier U Mobile Sdn. Bhd. to increase overseas earnings.

DoCoMo and KT Freetel will each own 16.5 per cent of U Mobile when the purchase is completed, expected by February, the companies said in a statement today. The carriers will provide technical and management support to U Mobile for its third- generation, or 3G, business, and promote roaming services to their customers using the Malaysian operator’s network, they said.

U Mobile is a unit of U Telecom Sdn. Bhd., formerly known as MiTV Corp., a pay-television provider that in 2006 won a licence to offer 3G services in Malaysia. The U Mobile stake will help Seoul-based KT Freetel, which has reported seven straight quarters of profit decline, and DoCoMo, whose net income has fallen for two years, expand their sources of income.

“U Telecom has a sales network, which U Mobile will be able to tap when it starts 3G services,” Shuichiro Ichikoshi, a spokesman for Tokyo-based DoCoMo, said by telephone. U Mobile can also tap the parent company’s television programmes for its services, he said. U Mobile is scheduled to start offering services next year, said DoCoMo and KT Freetel, South Korea’s second-largest mobile- phone operator.

DoCoMo owns a 10.5 per cent stake in KT Freetel. Both companies offer services based on the wideband code division multiple access, or WCDMA, high-speed network.

Last month, DoCoMo started selling handsets compatible with the world’s most used mobile communication system to encourage customers to use their phones overseas. The company, which owns stakes in phone operators in Guam, the Philippines and Taiwan, expects sales from overseas to increase 29 percent to ¥45 billion in the year ending March 31, CFO Masayuki Hirata said June 21.