DoCoMo Eyeing $2.5 Billion Indian Network Investment

Japan's NTT DoCoMo is reported to be seeking a 26% stake in India's Tata Teleservices (TTSL) for price of around US$2.5 billion. Citing people familiar with the talks The Mint business newspaper said that the stake would value the CDMA operator at US$9.6 billion, and each TTSL customer at about $331.38

The deal is understood to be a part sale of a stake by the Tata Group worth 6% of the firm - and the rest would be a capital injection of just under $2 billion into the company - which would be used to finance the network's GSM roll out program.

Last month, the company said that it is planning to spend some Rs80 billion (US$2 billion) over the next two years on expanding both its GSM and CDMA networks. Various media reports at the time said that about Rs60 billion would be spent on the new GSM network the company is building, with the remaining Rs20 billion going on its existing CDMA network,

The company is planning to launch their GSM service by the end of the year, but has only been granted radio spectrum in 5 of the country's 22 license circles. The company has also announced plans for a WiMAX network covering 15 cities by 2009.

"As a policy in the Tata group, we do not comment on speculative queries," wrote a spokesperson for TTSL. A spokesman for NTT wrote in an email: "Regarding what you have requested, there is nothing we can disclose at this moment."

On the web: The Mint

Posted to the site on 19th October 2008