Docomo to buy 26% stake in Indian firm
Written by Writer on Thursday, November 13th, 2008
Docomo to buy 26% stake in Indian firm
NTT Docomo Inc. said Wednesday it has reached an agreement with Tata Teleservices Ltd. to acquire a 26 percent stake in the Indian carrier for 130.7 billion rupees, or about ¥264 billion.
With the investment, Japan’s largest mobile phone carrier aims to boost its foothold in India’s fast-growing wireless market to help offset slowing growth in Japan.
About 20 percent of the stake in the mobile phone unit of Indian conglomerate Tata Group will be in the form of new shares, with the remaining 6 percent bought from current shareholders.
NTT also formed a strategic alliance with Tata Sons Ltd., the owner of the Tata name and the Tata trademark.
Through a joint tender offer with Tata Sons, NTT Docomo said it plans to acquire up to 20 percent of the outstanding common shares of Tata Teleservices (Maharashtra) Ltd., another telecommunications unit.
“As a result of the capital alliance, the partners expect to expand mobile communication operations in the fast-growing Indian mobile market, aiming to increase operating revenue and achieve steady business growth,” NTT Docomo said in a statement.
Tokyo-based NTT Docomo has been seeking to expand its overseas operations by forming capital alliances with local mobile phone carriers.
The latest cases of such investment include a $100 million investment to acquire a 16.5 percent stake in Malaysia’s U Mobile Sdn Bhd. and a $350 million investment to acquire a 30 percent stake in TM International (Bangladesh) Ltd.
Last month, NTT Docomo cut its earnings forecast for the current business year ending next March due to weaker handset sales in Japan, where about 80 percent of people already own mobile phones.
As of Sept. 30, mobile phone subscribers in India numbered 315.31 million, up about 50 percent from a year earlier, according to the Telecom Regulatory Authority of India.
In Japan, the number of subscribers as of Sept. 30 rose 5.5 percent to 104.83 million, according to the Telecommunications Carriers Association.
The Japan Times
Thursday, Nov. 13, 2008
