NTT Docomo to sell entire stake in Tata Teleservices, exit India: report
NTT Docomo Inc, Japan's biggest telecom network by subscribers, will sell its stake in its loss-making Indian mobile phone joint venture to partner Tata Group, according to reports on Friday.business Updated: Apr 25, 2014 14:01 IST
NTT Docomo Inc, Japan's biggest telecom network by subscribers, will sell its stake in its loss-making Indian mobile phone joint venture to partner Tata Group, people with direct knowledge of the matter said on Friday.
NTT Docomo will make a formal decision on the sale of its 26.5% stake in Tata Teleservices Ltd at a board meeting on Friday, executives at the Japanese company said, without specifying a buyer.
NTT Docomo had invested 266.7 billion yen ($2.61 billion) in Tata Teleservices in 2009.
In India, an industry source familiar with the matter said the diversified Tata Group conglomerate would buy the stake, but did not specify a price. Singapore state investor Temasek and Indian businessman C. Sivasankaran also own small stakes in Tata Teleservices.
The NTT Docomo executives and the India industry source declined to be named as the matter was still confidential. A spokesman said NTT Docomo was considering various options for its overseas operations but did not give further details.
Spokespeople for Tata Group and Tata Teleservices in India were not immediately available to comment.
Unlisted Tata Teleservices expanded into lucrative GSM-based mobile phone services after the deal with Docomo and amassed subscribers by offering a cheaper per-second billing plan, but it subsequently failed to build on its initial success and has lost market share in the past two years.
It currently ranks seventh in terms of subscriber numbers among the 12 firms that operate in India's fiercely competitive telecoms market.
A Docomo executive said the 2009 deal gave the company an option to exit if Tata Teleservices did not achieve certain targets, and Docomo expects it has missed those targets in the fiscal year that just ended in March. He declined to give further details.
Analysts expect Docomo to report about 80 billion yen ($780 million) in related losses in the financial year ended on March 31 when it announces its earnings at 0600 GMT.