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Tata DoCoMo Plans R&D Centre For VAS Thrust; Inorganic Growth A Possibility

tatadocomologoNTT DoCoMo, which is in India through a partnership with Tata Indicom as Tata DoCoMo, is planning to add a research and development centre in India to produce value added services and applications for GSM and CDMA mobiles here, according to this TradingMarkets report.

Tata DoCoMo started with a pricing strategy and will soon catch up to Aircel and rival Reliance Communications (RCOM)’s new GSM network in offering VAS. Aircel is present in 18 circles and has a strong focus on VAS. It is now attempting to cut down on infrastructure costs by selling its 12,000 towers, estimated to be worth about $1.5 billion. RCOM, which has both GSM and CDMA networks, is also increasing its thrust on VAS through content and exclusive mobile broadcast partnerships.

M&A

A merger or acquisition could also be on the cards for Tata DoCoMo. Business Line reported it may choose inorganic growth. Parent company NTT DoCoMo’s MD Toshinari Kunieda said that the telecom arena in the country, with over ten players, was overcrowded. Consolidation in the telecom sector is inevitable; new telcos such as Etisalat DB India (previously Swan Telecom), Aircel, Loop Telecom (BPL), Datacom, Unitech Wireless, STel and Sistema Shyam (MTS) face an uphill fight for market share and turf wars will break out.

Tata DoCoMo currently operates in Madhya Pradesh, Chattisgarh, Andhra Pradesh, Karnataka, Mumbai, Tamil Nadu, Orissa and Kerala. It will soon launch in Pune and Goa. Nationwide coverage is expected by this year end. NTT expects the telco to turn profitable in three years.

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