DoCoMo buys 26% stake in Tata Teleservices for USD2.7 billion

13 Nov 2008

NTT DoCoMo, Japan’s largest mobile operator by users, yesterday agreed to pay USD2.7 billion for a 26% stake in Indian mobile and wireline operator Tata Teleservices (TTSL). TTSL is currently owned by India’s Tata Group (90.1%) and state-owned Singaporean investment company Temasek Holdings (9.9%). Bloomberg reports that DoCoMo also expects to make an open offer to acquire up to 20% of Tata Teleservices Maharashtra (TTML), through a joint offer with Tata Sons. Tata Group currently owns a 70.83% stake in TTML, with the remainder owned by private investors. TTSL currently operates in 19 Indian telecoms circles whilst TTML has a presence in two circles, Maharashtra (including Goa) and Mumbai. Both companies offer mobile and fixed-wireless services under the Tata Indicom banner, with 29.3 million CDMA-based subscribers at the end of September, making TTSL (including TTML) the sixth largest wireless operator in India. Teleservices, which also has a resale partnership deal in place with Virgin Mobile, is eyeing a move into the GSM sector, and a fresh injection of capital would help it roll out new network infrastructure.

DoCoMo’s president Ryuji Yamada said at a press conference that the Japanese firm is committed to the management of Tata Teleservices and sees it as a long-term investment. The move forms part of a strategic overseas push announced in June, when DoCoMo announced its intention to invest in markets including Bangladesh, Vietnam, Cambodia, Laos and China to capitalise on low mobile penetration levels. That month it acquired a 30% stake in Bangladeshi GSM mobile operator Telecom Malaysia International (Bangladesh) Limited (AKTEL), by buying A K Khan & Co’s entire stake for USD350 million.

India, NTT DOCOMO, Tata Teleservices (TTSL, incl. TTML)