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DoCoMo confirms Sony card venture

Sony already supplies camera phones to DoCoMo.
Sony already supplies camera phones to DoCoMo.

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TOKYO, Japan (Reuters) -- Sony Corp and NTT DoCoMo have agreed to form a joint venture for smart-card chips used in mobile phones, DoCoMo said Monday.

DoCoMo said the venture, to be known as FeliCa Networks, is targeted to be set up in January 2004. FeliCa is the name of Sony's contactless smart-card technology.

Sony Chief Executive Nobuyuki Idei and NTT DoCoMo Chief Executive Keiji Tachikawa are to attend a briefing later Monday.

Last week, Sony and DoCoMo sources told Reuters the two companies planned to develop smart-card chips that will allow consumers to use their cell phones to pay for purchases.

DoCoMo, Japan's biggest mobile phone operator with 45 million subscribers, and Sony will form a joint venture in which Sony will take more than a 50 percent stake, the DoCoMo and Sony sources said.

The venture will develop a chip based on Sony's FeliCa technology.

Sony's FeliCa-based smart-cards have already been used at 2,700 convenience stores, including am/pm Japan Co outlets, for settlement of bills, using the "Edy" electronic money service.

Japan's biggest railway operator, East Japan Railway Co, has adopted the technology in its automated ticketing system.

Analysts said the joint venture should help Sony establish its technology as the industry standard, but any immediate impact on earnings would be limited.

DoCoMo plans to start selling third-generation mobile phones containing the smart-card chip as early as the middle of next year, the DoCoMo source said.

Phones with built-in smart card chips would allow users to pay for purchases at convenience stores or buy train tickets by simply holding their mobile phone over a card-reading machine.

Shares of Sony closed 1.06 percent higher Monday at 3820 yen, while NTT DoCoMo shares fell 0.41 percent to 245,000 yen. The Nikkei 225 average finished 1.15 percent ahead.



Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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