DoCoMo to buy 26% of Tata Tele for $2.7 bn

Japanese business daily the Nikkei Wi-fi wireless networks today reported that DoCoMo will buy a stake of about 26 per cent in Tata Teleservices Ltd for 260 billion yen ($2.7 billion). This would be the latest of a series of overseas acquisitions by DoCoMo and follows $350 million investment in Bangladesh's No.3 cellphone carrier.In September DoCoMo was in talks to buy a stake in Tata, part of the Tata Group conglomerate and parent of Tata Teleservices (Maharashtra) Ltd.

The deal would add to a record value of overseas acquisitions by Japanese firms this year as companies increasingly snap up competitors abroad, taking advantage of tumbling global stock markets and the yen's recent surge.

DoCoMo spent nearly 1.9 trillion yen in the late 1990s and early 2000s to buy small stakes in operators around the world to promote use of its i-mode mobile Internet technology and ensure the adoption of 3G networks on the same W-CDMA standard that it uses.But it saw its investments sour, and pulled out of AT&T Wireless Services Inc, Dutch operator KPN Mobile N.V. and Hutchison 3G UK Holdings after incurring heavy losses.

DoCoMo may buy stake in Tata Tele

NTT DoCoMo, Japan's biggest mobile phone operator, is in talks to buy a stake in India's Tata Teleservices in a deal that may exceed $933 million, company sources said. The news boosted shares in a unit of Tata Teleservices, Tata Teleservices (Maharashtra), by as much as 4% in Indian market.

DoCoMo is increasingly expanding its overseas presence as growth in the Japanese market slows, and the Tata deal would follow its $350 million investment in Bangladesh's No. 3 cellphone carrier TM International (Bangladesh) Ltd. The sources said DoCoMo's investment would likely only amount to a minority stake and it was unclear if the Japanese firm would clinch the deal as other carriers were keen to take a stake in sixth-largest player Tata Teleservices, part of the Tata Group conglomerate. DoCoMo, which competes with KDDI Corp and Softbank Corp, said in June it would seek more acquisitions overseas and particularly in Asia, and it will look into China and India if the chance arose.

India is the second-biggest market in the world after China, and the market is growing some 50% annually as only 23% of the population are now carrying cellphone. Demand for data communication is expected to show explosive growth after 2009 when 3G services starts, enabling faster transmission.

Idea, Spice Tele may call off deal

Idea Cellular and Spice Telecom might call off their proposed merger talks. The two companies were unable to come to terms on the valuation, and also on the future structure of the management to run the merged entity.

According to a source close to the development, Spice Telecom will go ahead with its planned initial public offering (IPO).

“The deal seems to be off, at least for the moment. Valuation is believed to be key issue, while differences in sorting out of management and operational issues of the joint company also played a part,” the source told Business Standard today.

Spice Telecom, which has received approval from the Securities and Exchange Board of India, would go ahead with its Rs 600 crore IPO.

The combined entity would have had a market share of over 11 per cent in the mobile space. However, even after the merger, the company would remain the fifth largest mobile operator in the country-far behind Bharti, Hutch, BSNL, Reliance and Tata Teleservices.

Read more in The Business Standard article.