O2 preparing to pull plug on i-mode

O2 UK, owned by Spanish telco Telefonica, is preparing to pull the plug on its i-mode mobile web service, the company confirmed Tuesday.

Despite the popularity of the NTT DoCoMo created technology in Japan and 24 other operators worldwide rolling out the platform, the launch of 3G services has taken some of the shine off i-mode outside Japan and has worsened its precarious position in relation to WAP.

O2 UK will continue to support i-mode for the next two years but will not launch any new i-mode handsets. A spokesman told telecoms.com a limited range of devices has restricted growth of the service and said that the mobile web is being supported “by an increasing number of feature rich devices and tariffs accessing richer content at faster speeds.”

It was revealed recently, that many of Telefonica’s i-mode customers who wanted a 3G handset ended up buying a WAP handset instead because of the lack of choice in i-mode handsets. And after the disappointing performance of WAP over GPRS, users found that 3G speeds had greatly improved the mobile web experience.

But Telefonica is not the only operator to be having second thoughts about the technology.

KPN in the Netherlands, Mobile TeleSystems in Russia, Cellcom in Israel and Telstra in Australia have already joined the lengthening list of i-mode operators whose interest in the service has cooled off.

KPN, which has long championed i-mode as its premium browsing service, is no longer marketing the service separately from WAP and is beginning to question the need for a separate i-mode offering, according to ‘i-mode: Operator Strategy To Drive Data ARPU’, a recent report published by telecoms.com parent Informa Telecoms & Media.

KPN’s about face is significant, since it’s also responsible for i-mode’s presence in Germany and Belgium. Its German unit, E-Plus, has for some time been rumoured to be dissatisfied with i-mode, and now that its parent is losing enthusiasm for the service, its ties to it are likely to loosen even more.

The future of i-mode at Cellcom is also hanging in the balance, with the carrier having put the service on hold and no efforts being made to develop new content.

MTS has stopped advertising and marketing the service and has closed its i-mode site, but it continues to sell i-mode handsets and is keeping the service alive for existing users and for whoever wants to sign up to it.

And Telstra has become lukewarm regarding i-mode, although the loss of interest has much to do with the preferences of the carrier’s new management, which took over four months after Telstra’s i-mode launch in February 2005. The carrier’s new CEO, Sol Trujillo, is reported at the time to be unenthusiastic about the technology.