Japan's NTT DoCoMo Inc and South Korea's KT Freetel, seeking to expand abroad amid competition at home, today said they will together invest US$200 million in a new Malaysian mobile provider.

Japan's largest mobile operator DoCoMo and KT Freetel will each invest US$100 million and each take 16.5 percent stake in Malaysia's U Mobile, a third-generation service provider set to launch in 2008, a statement said.

KT Freetel and DoCoMo "will jointly participate in U Mobile's management and draw on their 3G expertise to enhance U Mobile's competitiveness," a joint statement said.

The deal will allow both companies to provide international roaming services for KT Freetel and DoCoMo customers travelling in Malaysia, it said.

Japan and South Korea have among the world's most advanced and saturated mobile telephone systems, but they are also largely incompatible with most of the rest of the world.

DoCoMo, a unit of Nippon Telegraph and Telephone Corp, was a pioneer of third-generation service, which provides Internet and other advanced functions.

But DoCoMo is attempting to offset weaker earnings due to tough competition at home by cashing in on robust demand for high-speed service in emerging markets.

With 53 million subscribers, DoCoMo has set a goal of a borderless mobile environment by 2010 for Japanese travellers in Asia.

DoCoMo acquired two wireless operators in Guam last year and set up its fourth overseas office in Vietnam three months ago. DoCoMo also holds a minority share in KT Freetel.