Mumbai: NTT DoCoMo Inc, Japan's biggest mobile phone operator, will buy a 26 per cent stake in Tata Teleservices for $2.7 billion (260 billion yen), to get a foothold in the world's fastest-growing major mobile market, Japanese business daily Nikkei reported.

The offer price values Tata Teleservices at $10.4 billion, against the $9 billion market cap of No 2 player Reliance Communications.

At 2.7 billion, DoCoMo's bill values the 26 per cent stake in Tata Tele almost equal to the $3 billion market value of larger rival Idea Cellular.

Tata Teleservices had a 29.3 million user base as of end-September and is currently expanding into GSM technology from its CDMA platform. Reliance Communication, the country's second largest telecom firm, on the other hand, claims almost double the user base of Tata Tele.

DoCoMo will also make an open joint tender offer with Tata Sons, the holding firm of the group, to buy up to 20 per cent in a listed unit of Tata Tele, as required by the SEBI takeover rules.

''This investment does not seek short-term returns but rather seeks long-term return through the growth of the Indian market as well as TTSL itself," DoCoMo chief executive Ryuji Yamada was quoted as saying.

''We consider the investment in TTSL as one of our most important deals in our overseas strategy," he added.

DoCoMo last year invested $350 million to acquire a stake in Bangladesh's No 3 cellphone carrier as it expands beyond a saturated home market.

DoCoMo, with its strengths in third-generation (3G) network services,  is increasing investments in developing countries where the technology is catching up.

India is the world's second-biggest mobile market, trailing only China. More than 10 million users signed up in September, taking the total customer base to 315.3 million, more than the population of the United States, and almost three times the size of Japan's market of 109 million subscribers.

JPMorgan advised DoCoMo on the deal, and Lazard advised Tata Teleservices.

DoCoMo will have to compete with a host of foreign firms such as Telenor, Etisalat and Sistema which have bought stakes in Indian companies and are gearing up to start operations.

Foreign firms can buy up to 74 percent in Indian telcos, but Tata Group normally holds majority stakes in all its core businesses. Yamada did not rule out the possibility of taking a majority stake in the future.

Japanese firms have made a record $63 billion of overseas acquisitions so far this year.

Tata Group, the parent of unlisted Tata Teleservices, has, meanwhile, put its plans for acquisitions on hold due to the global credit crisis.

Shares of Tata Teleservices (Maharashtra) closed up 7.6 per cent in Mumbai while DoCoMo shares ended up 1.3 per cent in a Tokyo market.