NTT DoCoMo Inc, Japan's biggest mobile-phone operator, today acquired a 26 per cent stake for 2.7 billion dollars (Rs 13,070 crore) in Tata Teleservices Ltd to expand into the world's fastest-growing major wireless market, valuing the company at 10.4 billion dollars.
Through a joint offer with Tata Sons, DoCoMo will also have to make an open offer to acquire up to 20 per cent of the outstanding common shares of Tata Teleservices (Maharashtra), which is listed on the Indian bourses, as per Indian regulatory laws.
Tata Teleservices (Maharashtra)'s net loss for the second quarter ended September 30 stood at Rs 47.35 crore. TTSL (M) shares were up 7.60 per cent to close at Rs 17.99 on the BSE.
"As a result of the capital alliance, the partners expect to expand mobile commnucation operations in the fast-growing Indian mobile market aiming to increase operating revenue and achieve steady business growth," a Tata press statement said.
NTT DoCoMo now joins foreign telecom firms like Vodafone (UK), Maxis (Malaysia), Telekom Malaysia (Malaysia), Etisalat (UAE) and Telenor (Norway), which are present in India through local JVs.
Earlier, the NTT board approved the investment. DoCoMo has been trying to enter the Indian market for some time. Tata Teleservices has also been trying to sell part of its stake for a while and it was in talks with South Korea Telecom two years ago, but the talks failed due to disagreement over price. Tata Teleservices has 30 million subscribers, making it the sixth-largest telecom company in India on that parameter.