NTT DoCoMo has 26% stake in Tata Teleservices

Jayesh Limaye, Nov 16, 2008 1000 hrs IST

DoCoMo will also buy a stake of up to 20 percent in publicly traded Tata Teleservices (Maharashtra) Limited (TTML).

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Japan's telecom major NTT DoCoMo Inc. has bought a 26 percent stake in Indian fixed and mobile operator Tata Teleservices Ltd, which is currently owned by Tata Sons Ltd. (the Tata Group), for 130.7 billion rupees (US$2.65 billion), according to an announcement by the two companies.



According to the deal with Tata Sons, DoCoMo will also buy a stake of up to 20 percent in publicly traded Tata Teleservices (Maharashtra) Limited (TTML), which is an affiliate of Tata Teleservices that provides services in the Maharashtra region of India (including Mumbai).

Interestingly, this move from DoCoMo comes only weeks after Norwegian powerhouse Telenor ASA announced a $1 billion investment in Indian GSM startup operator Unitech Wireless.

Tata Teleservices, has 29.3 million mobile customers and 8,21,000 landline customers (as of September end) and provides fixed and wireless CDMA services in 20 of India's 23 telecom circles (including Maharashtra business).

It is the sixth largest mobile operator according to subscriber base, with a 9.3 percent market share. India has a total of 315 million mobile connections including GSM and CDMA, and the number increases by about 10 million every month.

DoCoMo and Tata said they plan to "expand mobile communication operations in the fast-growing Indian mobile market, aiming to increase operating revenue and achieve steady business growth," in a joint press release issued yesterday.

DoCoMo will be thus pitched against another leading global mobile operator Vodaphone Group plc, which also entered the Indian mobile market last year after buying Essar. Currently, Vodafone Essar is India's second largest mobile operator with 54.6 million customers.

NTT DoCoMo has a very long experience in advanced mobile technologies, handsets and services and these will prove to give it an edge over its competitors. This experience will also be useful to Tata when 3G licenses are finally awarded in India. The 3G auction is expected to take place early in 2009. DoCoMo has more than 54 million mobile customers in Japan, and is technologically advanced enough to be even able to advise Tata on any plans to deploy so-called 4G technologies.

It would be interesting to note that DoCoMo is not entering only the Indian mobile market, but it also acquired a 30 percent stake in Bangladesh GSM mobile operator Aktel, a majority of which is owned by Malaysian carrier TM International Bhd. for an undisclosed amount.



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