Tata Teleservices to offer strategic stake to DoCoMo

Tata Teleservices is reported to be in talks to strike a strategic relatioship with leading Japanese mobile operator, NTT DoCoMo Inc, and may consider offer it  offering it a minority stake in the company.

According to media reports quoting unnamed sources, the Tata Group will offer a minority stake of 12 per cent, which amounts to a investment of around $933 million by DoCoMo who with more than 100 million users, is Japan's largest mobile phone operator.

Some sources in the industry feel that DoCoMo was looking for a larger stake of 26 per cent, which would translate into a big gain of approx Rs10,000 crore to the investor.

Tata Teleservices, operates mobile services in the CDMA bandwith in 6,000 towns across 19 circles and has a customer base of more than 27 million and holds 9 per cent of the market share. It will soon be offering services in the GSM bandwith also.

DoCoMo would like to tap into the booming and expanding cellular Indian market, which has been growing at 50 per cent annually and is likely to see a burst in subscribers when India starts its 3G services.

It has also been actively expanding into the South Asian market by acquiring stakes in many telecom companies – see chart below.

HTCL (Hong Kong) Dec. 1999 24.1%
FET (Taiwan) Feb. 2001 4.7%
KT Freetel (South Korea) Dec. 2005 10.3%
PLDT (Philippines) Mar. 2006 14.0%
Guam Cellular (Guam & Mariana) Dec. 2006 100%
U-Mobile (Malaysia) Apr. 2008 16.5%
TM International (Bangladesh) 2008 30%