DoCoMo may raise stake in Tata Tele

Dylan Bushell-Embling
telecomasia.net
Japan's NTT DoCoMo is reportedly considering increasing its stake in India's Tata Teleservices using a call option.
 
DoCoMo, which currently owns a 26% stake in Tata Teleservices, may use its right under the shareholder agreement to boost this stake further, India's Financial Express reported
 
But Tata Teleservices is said to be considering mounting an offer to buy back DoCoMo's stake in the company.
 
DoCoMo first bought its stake in Tata Teleservices in 2008 for $2.7 billion. The companies are also partners in GSM and 3G joint venture Tata DoCoMo.
 
Under the terms of the agreement between the companies, DoCoMo has the right to increase its stake in Tata Teleservices as long as the latter meets certain requirements. These parameters include minimum subscriber, revenue and profit targets.
 
But the agreement also gives Tata Teleservices the right to mount a mandatory buy-back of DoCoMo's entire stake in 2014 if the requirements are not met.
 
According to Financial Express sources, it is unlikely that the targets will be reached in time, and Tata is evaluating whether it will take up its right.

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