Japanese telcos petition MIC to stop NTT’s DOCOMO buyout

11 Nov 2020

A number of Japanese telecoms companies, including SoftBank Corp and KDDI (au), have sent a joint letter to the Ministry of Internal Affairs and Communications (MIC) protesting Nippon Telegraph & Telephone Corp (NTT Corp’s) plan to take full control of mobile arm NTT DOCOMO, arguing such a move would ‘prevent fair competition’. In the joint letter, the carriers have challenged NTT’s multi-billion takeover bid arguing that making DOCOMO a wholly owned subsidiary ‘will create a powerful force that dominates the market’ and that not only will it prevent fair competition in the domestic market, but that ‘user benefit created through competition could be lost’. According to AFP, the telcos’ appeal calls on the MIC ‘to set up measures to protect an environment of fair competition and instruct and ensure compliance and implementation’.

As reported by CommsUpdate, in September this year NTT Corp announced it was looking to take full control of its wireless arm by buying out the roughly 34% stake in the company it does not already own, and then take the company private. The nation’s former state-owned monopoly listed the cellular business 28 years ago but is now looking to effectively reverse that, in what analysts say could be Japan’s biggest ever tender offer. With competition in the nascent 5G segment ramping up and with Japan’s new prime minister Yoshihide Suga looking to shake up the domestic telecoms market through his insistent calls to force mobile operators to make deep price cuts, having full control of NTT DOCOMO would allow NTT to push down prices quickly, prompting competitors to follow suit.

NTT’s tender offer remains open until 16 November 2020, while the full buyout is expected to be finalised by the end of its fiscal year, end-March 2021.