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NTT DoCoMo, Tata agree on mobile phone alliance

Japan's top mobile carrier, NTT DoCoMo Inc., said Wednesday it has agreed with Tata Teleservices Ltd. on a mobile phone alliance through the purchase of a 26 percent stake in the Indian company.
/ Source: The Associated Press

Japan's top mobile carrier, NTT DoCoMo Inc., said Wednesday it has agreed with Tata Teleservices Ltd. on a mobile phone alliance through the purchase of a 26 percent stake in the Indian company.

DoCoMo will spend about $2.7 billion to acquire 26 percent of one of India's largest telecom service providers, the Japanese company said in a statement.

The investment would allow DoCoMo to gain a foothold in India's fast-growing telecommunications market as the company seeks expansion abroad amid sluggish growth at home.

DoCoMo said it will acquire about 20 percent in the mobile phone arm of India's largest conglomerate Tata Group through a tender offer, and purchase another 6 percent from existing shareholders.

"As a result of the capital alliance, the partners expect to expand mobile communication operations in the fast-growing Indian mobile market, aiming to increase operating revenue and achieve steady business growth," DoCoMo said.

The number of Japanese subscribers is still growing but at a slower rate — up 0.3 percent in October from the previous month to 105 million.

In contrast, India's market continues to expand rapidly, despite the recent economic downturn. More than 10 million subscribers signed on for mobile phone services in September, bringing the total to 315.31 million, according to the Telecom Regulatory Authority of India.

Tata Teleservices, which covers nearly all of India, is part of the $62.5 billion Tata Group, which has more than 80 companies and about 330,000 employees.

The alliance with DoCoMo also involves Tata Sons Ltd., the owner and promoter of Tata Group brands, which have made some of India's highest profile overseas acquisitions in recent years, including Tetley Tea, Corus steel, and Jaguar and Land Rover.

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Associated Press writer Erika Kinetz contributed to this report from Mumbai.