NTT Corp considering USD19bn bond offering for DOCOMO acquisition; mobile unit to slash prices

3 Dec 2020

Nippon Telegraph and Telephone Corp (NTT Corp) is reported to be mulling plans to launch bond offerings worth up to USD19 billion both at home and abroad, as part of a plan to refinance loans for the roughly USD40 billion acquisition of its mobile business, NTT DOCOMO. Reuters quotes NTT Corp chief executive officer Jun Sawada as saying: ‘It is ideal to borrow up to two trillion yen [USD19.2 billion],’ adding that the bond issuance of JPY700 billion has ‘already been decided and … future offerings would include foreign currency debt.’

As reported by CommsUpdate, last month the Japanese carrier completed a tender offer for its wireless carrier business, in the process upping its stake from 66.21% to 91.46% under the roughly USD40 billion transaction. It funded the acquisition through bridge loans totalling JPY4.3 trillion from Japan’s biggest three banks and others, and intends to refinance part of the loans with long-term bonds. The tender offer launched on 30 September as part of NTT Corp’s drive to take full control of the mobile subsidiary; the offer ended on 16 November. NTT offered JPY3,900 (USD37) per share, representing a 40.5% premium on NTT DOCOMO’s closing price of JPY2,775 the day before the 29 September announcement of the tender offer.

NTT Corp will now look to buy out the remaining shareholders of NTT DOCOMO and delist the company. The move comes in response to incoming prime minister Yoshihide Suga’s call for operators to slash prices, and here DOCOMO is apparently poised to comply. According to Kyodo news the carrier will introduce a 20GB monthly plan dubbed ‘ahamo’ in March next year priced at JPY2,980 (currently JPY8,175 in Tokyo) and available through online contracts, becoming the first of Japan’s major wireless carriers to lower mobile phone fees following government pressure. The new plan also includes unlimited free calls of up to five minutes, and is expected to intensify price competition in the local market – per Prime Minister Suga’s aims. KDDI and SoftBank have already indicated they intend to usher in 20GB plans for around JPY4,000 per month.

Japan, Nippon Telegraph and Telephone Corporation (NTT Corp), NTT DOCOMO