America Online, the world's biggest internet service provider, is believed to be in talks with NTT DoCoMo, Japan's largest mobile phone company, about jointly developing a global internet access service for mobile phones.
The two are understood to be talking about an alliance to wrest control of the fast growing mobile internet business from a rival standard being promoted by European companies. Both refused to comment yesterday but reports said that a deal could be struck next month.
AOL, the world's most popular web portal, with 23m subscribers, has built its empire around the personal computer market, but it has been slow to respond to the expansion of wireless methods of accessing the net such as cellular phones and palmtop devices.
A deal with NTT DoCoMo, which could result in the Japanese company taking a stake in AOL Japan, could improve its technological offering and fill a gap in the US group's global strategy.
The company unveiled a series of agreements with mobile phone companies in the US and Europe earlier this year and last month, it joined Carphone Warehouse to offer a new internet portal in Britain and continental Europe.
DoCoMo's success has been largely built on i-mode, its cheap and simple mobile internet system that has attracted 8m Japanese subscribers in a year and half.
According to Japanese media, DoCoMo will provide AOL with the operational know-how and wireless technology used in i-mode, which offers a 24-hour link to the net. In return, AOL can offer a huge range of web content, which is seen as the key to deciding which format proves most popular with consumers.
DoCoMo confirmed that it was in talks with a number of global internet firms but refused to comment on AOL.
The move would fit with DoCoMo's aggressive strategy to take i-mode, still available only in Japan, worldwide.
The company has a ¥2 trillion (£12.5bn) war chest to buy stakes in overseas telecomunication and internet companies. By the end of the year, it is expected to launch i-mode in Britain, where it would challenge wireless access protocol (Wap) services.
DoCoMo will be the first to offer Wideband Code Division Multiple Access (WCDMA) services, which will provide transmission speeds suitable for moving images and music.
A deal could also include the use of services provided by Time Warner, the media group set to merge with AOL. Executives from both US companies were due to appear before US regulators to discuss their proposed merger today.
