NTT DOCOMO Snares Up A Sizable Stake In Tata Tele

Author: Avijit Bajpai

In one of the notable acquisitions in Indian economy, NTT DOCOMO is all set acquire 26 percent stake in Tata Teleservices, including 20 percent from equity and 6 percent from current shareholders, CNBC-TV18 reported, and the cost of open acquisition will be set on the basis of minimum price set by the regulatory authority Sebi on the respective date.

The deal primarily hovers around the existing assets, as the company has no new licence takeovers, and the nature of the deal is akin to the Vodafone-Hutch agreement.

Though, the initial price-tag of the deal was estimated around USD 2.7billion, but the current valuation of the may sit anywhere between USD 1.5-2.7billion for 26 percent stake in Tata Teleservices, and TTSL will utilise the funds in promotional activities and strategic expansion.

NTT Docomo will club with Tata Sons to make an offer to buy 20 percent stake in the listed Tata Teleservices Maharashtra, or simply TTML, a Tata Teleservices owned company.

The deal tenders a win-win situation for both the partner companies, as an agreement with India’s major telecom player TTSL, would provide NTT an exposure to one of the fastest growing telecom markets across the globe, whereas TTSL would certainly be benefited from NTT’s advanced WCDMA and i-mode technologies.

TTSL holds a substantive subscriber base of 30 million.