NTT DoCoMo to offload its stake in Tata Teleservices

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NTT DoCoMo to offload its stake in Tata Teleservices
NTT DoCoMo, a leading Japanese telecom operator by subscribe base, is set to offload its 26.5% stake in the Indian telecom services company, Tata Teleservices, A Reuters report has stated. The decision in its respect shall be taken on the sidelines of the board meeting today, " the report further adds.

Soon after the deal with DoCoMo, Tata Teleservices that provided services as Tata DoCoMo gained substantial market share in the initial years by foraying into the GSM-based mobile services and offering a per-second billing plan at cheaper rates. But the initial gains failed to sustain and the company lost its market share in the last two years. At present, in terms of subscriber base, the company ranks seventh among all the other twelve players in the industry.

NTT DoCoMo entered into a deal with the Indian telecom operator in the year 2009 with acquisition of stake in the company for a consideration of $2.61 billion. And terms of the deal enable DoCoMo to make an exit, in case the Indian entity fails to meet few of the stated targets and as the Tata TeleServices anticipates losses in the financial year passed by, the exit from the Indian continent has become to the fore. The Nikkei report quoted in Livemint says "But the operations have languished, with Docomo apparently booking related impairment charges of about 50 billion yen in the year ended 31 March".

As per the Reuters report, the holdings in the company is likely to be offloaded to the diversified Tata Group. Given its likely exit from the Indian shores, NTT DoCoMo will need to decide on new growth strategy and in its direction the company is mulling various options for its operations in the overseas market.

Story first published: Friday, April 25, 2014, 12:38 [IST]
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