NTT DoCoMo Inc and India's Tata Teleservices will announce a capital alliance later on Wednesday giving Japan's top mobile operator a foothold in the world's fastest-growing mobile market.
Japan's biggest telecom will pay 260 billion yen ($2.7 billion) for a 26 percent stake in India's No.6 wireless carrier, business daily Nikkei reported, as it speeds up its expansion beyond a mature home market. Its deal with Tata Teleservices, which the companies will unveil at 1000 GMT, follows a $350 million investment in Bangladesh's No.3 cellphone carrier and will add to the record $63 billion of overseas acquisitions by Japanese firms this year. But as DoCoMo expands, the Tata Group, parent of Tata Teleservices and the flagbearer for corporate India's recent overseas expansion, has put its plans for acquisitions on hold due to the global credit crisis. Shinji Moriyuki, a telecoms analyst at Mitsubishi UFJ Securities, said DoCoMo's recent acquisitions in Asia would be positive, especially with the company's extensive knowledge of third-generation network services to which many developing countries are now moving. "Many people have voiced concerns because of its overseas investment spree in the early 2000s and failures afterward, but business conditions are totally different now," Moriyuki said. "This time, the acquisition value should not be too large because of sluggish stock markets, it can count on growth in developing markets, and both parties should be able to find synergies because of the current timing that 3G services are about to be launched." POTENTIAL India is the world's second-biggest mobile market, trailing only China. More than 10 million users signed up in September, taking the total customer base to 315.3 million, more than the population of the United States, and almost three times the size of Japan's market of 109 million subscribers. Researcher Gartner forecasts India's mobile user base will more than double to 737 million by 2012, as just over a quarter of India's 1.1 billion population currently own mobile phones compared with a penetration level of about 85 percent in Japan. It will face tough competition though, as foreign firms such as Telenor, Etisalat and Sistema are gearing up to start services in India, where currently home-grown Bharti Airtel and Reliance Communications dominate along with a Vodafone unit. Carriers in India at the moment provide only 2G services. A global auction of radio waves for 3G and 4G wireless services, which provide more advanced mobile services including video, is due in January. Tata Teleservices is an unlisted unit of the salt-to-software Tata Group, and is the parent of listed Tata Teleservices (Maharashtra) Ltd. Shares in DoCoMo ended up 1.3 percent, while Tata Teleservices (Maharashtra) jumped more than 14 percent to their highest since early October in a weaker Mumbai market, before paring gains to 5.5 percent. Another Tata firm, Tata Communications, which provides international services, rose as much as 6.3 percent. The Nikkei said DoCoMo would obtain about 20 percent in Tata Teleservices through new shares and buy another 6 percent from existing shareholders. Foreign firms can buy up to 74 percent in Indian telcos, but Tata Group normally holds majority stakes in all its core businesses. The DoCoMo deal comes a day after Japanese chemical maker Mitsubishi Rayon announced a $1.6 billion acquisition of British rival Lucite International. Earlier this year No.3 drug maker Daiichi Sankyo forged a $4.6 billion deal for a controlling stake in India's Ranbaxy. DoCoMo spent nearly 1.9 trillion yen in the late 1990s and early 2000s on 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 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. The Tata Group, which splashed out an Indian record of $13 billion for steelmaker Corus in 2007 and this year bought Jaguar and Land Rover $2.3 billion, has put further acquisitions on hold. ($1=97.63 yen=48.7 rupees) (Additional reporting by Yumiko Nishitani; Editing by John Mair) Keywords: TATA/DOCOMO ([EMAIL PROTECTED]; Reuters Messaging: sachi.izumi.reuters.com @reuters.net; +81-3-6441-1809) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. When prosperity comes, do not use all of it. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
