DoCoMo to buy 26 per cent in Tata Tele for $2.7 billion
12 November 2008
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.