Japan's largest mobile carrier NTT DoCoMo is acquiring a 3.78% stake in filmand publishing company Kadokawa Group Holdings as part of a tie-up aimed atdeveloping content for DoCoMo cellphone users.

NTT DoCoMo will pay $34.45m(Y4bn) for 1.03 million new shares in Kadokawa, making the mobile giant theseventh largest shareholder in the company.

The deal facilitatesKadokawa's strategy to expand its mobile contents business through NTT DoCoMo'sextensive network of 52 million subscribers. Kadokawa has now established 40mobile sites through DoCoMo's iMode service, with further plans to createportal sites offering comics and video contents.

The alliance also sees NTT DoCoMoparticipate in the production consortiums led by Kadokawa Herald Pictures tofinance feature films. At the very earliest, Kadokawa hopes to release thefirst films with NTT DoCoMo's involvement in the first half of 2007.

In addition, Kadokawa HeraldPictures' subsidiary Herald Enterprises, which manages the group's expandingCineplex multiplex chain, will also implement DoCoMo's 'iD' credit service at11 sites around the country by next June. The service allows customers topurchase movie tickets and merchandise via mobile phone.

Kadokawa has executedseveral deals in recent years to consolidate and strengthen its in-housepublishing, film and media arms. In April, the company sold off almost half ofits share in production and distribution company Asmik Ace to concentrate onits own merged production, distribution and exhibition business Kadokawa HeraldPictures.

This was followed by a joint$18m animation fund with the Development Bank of Japan to underwrite 35 film and TV animation productionsover the next five years.

Established in 1992, NTT DoCoMocurrently holds a 55.5% share of Japan's mobile market.