wordpress blog stats
Connect with us

Hi, what are you looking for?

Updated: NTT Docomo selling its 26.5% stake in Tata Teleservices by June 2014

tatadocomo

Update: NTT Docomo has now officially announced that it is selling its entire stake comprising 1.25 billion shares (1,248,974,378 shares) which represents about 26.5% stake in the telco through the equity method.

The company plans to exercise this option in or before June 2014, in case Tata Teleservices fails to achieve certain specified performance targets for the fiscal ended March 31, 2014.  The company has an an option to sell its stake for Rs 7,250 crore (about 50% of the acquisition price) or a fair market price, whichever is higher. It is however uncertain on how the option will be performed.

EarlierNTT Docomo is offloading its 26% stake in Tata Teleservices, the company’s joint telecom venture with Tata Group, reports Nikkei Asia Review. It says that the company is in talks to sell its stake to Tata Group and exit India. We are currently awaiting a response from NTT Docomo & Tata Teleservices and will update the article once we hear back.

Interestingly, a source-based The Economic Times report from earlier this month, had suggested that NTT Docomo was retaining its 26% stake in Tata Teleservices for at least another year. This extension had apparently been provided for the company to find a buyer and get a higher valuation for its holdings.

This offloading has actually been doing the rounds since June 2013, when there were reports of NTT Docomo selling its stake to Sistema, however NTT Docomo had denied this a month later saying that it has no plans to sell its 26% stake and exit the market. This was despite three of its licenses being revoked by the Supreme Court in February 2012 and the company continuing to make losses.

Advertisement. Scroll to continue reading.

NTT Docomo’s Investments in Tata Teleservices

NTT Docomo had acquired 26% stake in Tata Teleservices in March 2009, after receiving the Government nod to buy 27.31% stake in TTSL for Rs 12,924 crores. It had further invested Rs 784 crore over two financial years ending March 2012.

The company had earlier skipped an option to increase the Tata Tele stake to 35% in March 2012, citing the existing regulatory situation in the country. It had another call option to increase the Tata Tele stake to 51% or else sell the 26% stake back to Tata group at a negotiated price last month. There is currently no information on whether the company had skipped this option as well.

Tata Teleservices financial woes

Tata Teleservices which operates mobile services under the Tata DOCOMO brand with its sister company Tata Teleservices Maharashtra Ltd (TTML) has been reeling under losses for several years now. The company’s net worth had reportedly turned negative for the first time last year after incurring a net loss of Rs 4,858 crore on operating income of Rs 10,799 crore for the fiscal FY13.

The telco had also completed the proposed surrender of 20MHz of CDMA spectrum to the Department of Telecommunications (DoT) in December 2013. This surrender was due to the imposition of the one-time spectrum fee by DoT. (More on that here).

Advertisement. Scroll to continue reading.

Tata Teleservices was also the only telco among the qualified bidders, which didn’t pick up spectrum either in the 1800MHz band or the 900MHz band in the recently concluded 2G spectrum spections. There have been rumors of Tata Group looking to exit the telecom industry altogether with Vodafone being the prospective buyer.

Written By

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

The US and other countries' retreat from a laissez-faire approach to regulating markets presents India with a rare opportunity.

News

When news that Walmart would soon accept cryptocurrency turned out to be fake, it also became a teachable moment.

News

The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.

News

In this excerpt from the book, the authors focus on personal data and autocracies. One in particular – Russia.  Autocracies always prioritize information control...

News

By Jai Vipra, Senior Resident Fellow at Vidhi Centre for Legal Policy The use of new technology, including facial recognition technology (FRT) by police...

You May Also Like

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ