Japan’s DoCoMo to acquire 26 percent in Tata Teleservices (Lead)November 12th, 2008 - 7:54 pm ICT by IANS
New Delhi, Nov 12 (IANS) Leading Japanese mobile telecom operator NTT DoCoMo will pick up a 26-percent stake in Tata Teleservices for $2.7 billion (Rs.13,070 crore or Rs.130.7 billion), it was announced Wednesday. This deal takes Tata Teleservices’ valuation to around $10.38 billion.
DoCoMo will also make an open offer to acquire at least 20 percent of the outstanding equity shares of Tata Teleservices Maharashtra, part of the $62-billion Tata group, India’s largest industrial house.
The open offer will be made along with Tata Sons, the holding arm of the Indian company, as per guidelines issued by the market watchdog, Securities and Exchange Board of India (Sebi), the two companies said in a statement.
“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,” the statement added.
The deal comes in at a time when India’s telecom market is expanding, with almost 9.8 million subscriber addition every month, which has taken the total tally to 353.66 million subscribers (wireline and wireless) in September.
Mobile telecom operators in India are gearing up to expand their networks in the third generation (3G) mobile space and marks another consolidation in one of the world’s fastest growing telecom markets.
DoCoMo’s move follows a series of high-value acquisition in the mobile space, triggered of by UK-based Vodafone that acquired 67 percent of Hutch Telecom International’s stake in Hutch-Essar at an enterprise value of $19.3 billion (approx Rs.860 billion).
Following this, Swan Telecom was acquired by Norwegian giant Telenor, and Unitech Wireless by the UAE-based Etisalat.
NTT DoCoMo, a global telecom player serves almost 53 million customers including 46 million subscribers of FOMATM - the world’s first 3G mobile service based on W-CDMA.
The company has a strong market presence in Japan with almost 50 percent of the country’s population using its services.
The two companies are expected to benefit from the experience gained by DoCoMo, as the Japanese operator was the first to launch third generation (3G) mobile phone service based on CDMA technology in 2001.
The Tata Group, along with the Anil Dhirubai Ambani Group (ADAG), are market leaders in offering telecom services based on CDMA technology.
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